Sub-5% Mortgage Deals Down 99%: What Buyers Can Now Afford

By Lisa Hayes · 12 October 2026

Cheap mortgage deals have all but disappeared. According to Moneyfacts, the number of fixed-rate mortgages priced below 5% collapsed from 1,494 at the start of September to just nine this week, and the average five-year fixed rate has hit 6.00%. For a buyer borrowing £250,000 that means roughly £163 more a month than at the start of the year, and that is the number your next buyer is quietly doing on the back of an envelope before they even book a viewing.

• 1,494 → 9fixed deals under 5%, start of September to this week (Moneyfacts)
• 6.00%average five-year fixed rate, highest since late September 2023
• 5.98%average two-year fixed rate, highest since mid-December 2023
• £1,611monthly repayment on £250,000 over 25 years at 6.00%

What actually happened to mortgage rates this month?

Let's strip it back to the facts, because the headlines have been shouty. Moneyfacts, which tracks the whole mortgage market, reported that the average five-year fixed rate reached 6.00% in the first week of October. It's the first time it has been that high in roughly three years. The average two-year fixed rate moved from 5.96% on Friday 2 October to 5.98% on Monday 5 October, which Moneyfacts says is its highest since mid-December 2023.

The more telling number is not the average, though. It's the shelf. At the start of September, Moneyfacts counted 1,494 fixed-rate mortgage products priced below 5%. By this week that was nine. A fall of 99% in about five weeks isn't a drift. It's lenders pulling the cheap stuff off the shelf almost in unison.

Variable deals tell a different story. Sub-5% variable-rate products only slipped from 411 to 389 over the same period, according to the same Moneyfacts analysis. So the squeeze is concentrated where most people shop: the fixed rates that buyers rely on for certainty.

Several of the biggest names did the pulling. Moneyfacts says Barclays raised selected fixed rates four times in September, while HSBC, Lloyds, Nationwide, NatWest, Santander and TSB each made three rounds of increases. When that many lenders move that often, a buyer who got a mortgage illustration on a Monday can find it stale by Friday.

Why are lenders pushing rates up when the Bank of England hasn't moved?

This is the bit that confuses people, and it's worth getting straight because it affects how you read every future headline. The Bank of England's Bank Rate has been held at 3.75% (the Monetary Policy Committee kept it there in September, with three members voting for a rise, according to the Bank's own summary). Yet fixed mortgage prices have shot up regardless.

The reason is that fixed-rate mortgages aren't priced off Bank Rate. They're priced off swap rates, which are the market's expectation of where interest rates will be over the next two to five years. Rachel Springall, finance expert at Moneyfacts, said recent swap rate volatility has been squeezing lenders' margins. Swap rates have risen as the conflict in the Middle East disrupts oil supplies and stokes fears of fuel-driven inflation, and a global bond sell-off has pushed UK 10-year gilt yields to an 18-year high.

In plain English: lenders borrow money at a price linked to those swap rates, lend it to you at a margin above that, and when their own costs jump they can't afford to leave the old price on the website. Hence the repeated rate rises. If you want a refresher on any of the vocabulary here, our property jargon explained guide covers swap rates, LTV and the rest without the waffle.

There's also a forward-looking element. Moneyfacts notes expectations that the Bank of England may raise the base rate before the end of the year. I'd treat that as a market expectation, not a certainty, but it explains why lenders are pricing defensively rather than waiting to see.

How much more does a typical buyer now pay each month?

Moneyfacts gave one worked example: a £250,000 mortgage over 25 years at the average five-year fixed rate of 6.00% costs £1,611 a month. The start-of-2026 average five-year rate was 4.91%, so the same loan would have cost about £163 a month less. That's £1,956 a year, almost £2,000 of extra after-tax money leaving a buyer's account.

I ran the same standard repayment formula for a few other loan sizes so you can see where your own buyers might sit. These are my own calculations using the Moneyfacts rates above (6.00% now versus 4.91% at the start of the year) over 25 years, capital repayment, and they ignore fees.

Mortgage size	Monthly at 4.91%	Monthly at 6.00%	Extra per month	Extra per year
£150,000	£869	£966	£97	£1,169
£200,000	£1,159	£1,289	£130	£1,559
£250,000	£1,448	£1,611	£162	£1,948
£300,000	£1,738	£1,933	£195	£2,338
£400,000	£2,317	£2,577	£260	£3,117

The £250,000 row differs from Moneyfacts' figure by a pound or so because of rounding; Moneyfacts quotes £163 a month and £1,956 a year. The picture is the same either way.

Now the part the tables don't show. A lender doesn't only ask "can you afford the payment?" It stress-tests the borrower at a higher rate than the one on offer. When the headline rate goes up, the amount a buyer can borrow goes down, even if their salary hasn't changed. So a buyer's maximum loan can shrink even though their salary hasn't moved an inch. That is the real way rates hit your sale price: not through sentiment, but through the maths on a mortgage broker's screen.

What does this mean for the price your house will sell for?

Here's where I'll give you a straight opinion rather than a hedge. Higher mortgage rates don't make your house worth less in some mystical sense. They shrink the pool of buyers who can pay a given price, and in a market already short of confidence that matters a lot.

And the market is short of confidence. The RICS residential survey for September, reported by Estate Agent Today, put the house price net balance at -32%, down from -28% in August. Surveyors expect prices to fall further over the next three months (a balance of -24%), but their 12-month expectation is flat at 0%. New buyer enquiries sat at -22% and agreed sales at -18%. The one genuinely positive reading was new sales instructions, at +6%, the first positive number since mid-2025. Tarrant Parsons, RICS head of market research, said a renewed rise in interest rate expectations "has created a fresh headwind for the housing market", but added that the latest results "do not point to any significant shift in direction."

Nationwide's September index, as covered by Moneyfacts, showed annual growth slowing to 0.8% from 1.6% in August, with the average price (not seasonally adjusted) at £274,251. Nationwide's chief economist Robert Gardner pointed out that affordability is improving underneath, since house prices have grown well below earnings for some time, and expects activity to pick up if the energy shock fades.

So read this correctly. There's no crash in these numbers. There is a slow, grinding market where buyers have the upper hand and the price you want is being negotiated down more often than it used to be. If you want to see where your own street sits right now, our house prices pages are a decent starting point, and a proper valuation will beat any national average.

Is it the wrong time to sell?

I get this question every time rates jump, and the honest answer is that it depends on why you're selling. If you don't have to move, waiting is a perfectly respectable decision. If you do have to move, because of a job, a divorce, an inheritance, a lease running out or a mortgage you can no longer comfortably carry, waiting for a better market is a gamble with a clock on it.

Consider what actually changes if you wait six months. Rates might fall. They might rise. Surveyors, when asked, are not predicting a rebound in the next three months and are only forecasting a flat year ahead. Meanwhile your running costs continue, and you keep competing against the same stock of homes. The longer a property sits, the more buyers read it as a problem, and the harder the eventual price negotiation.

The better question is not "is it the right time" but "what's my realistic position, and what are my options?" There's a reasonable chance you sell on the open market at a fair price. There's also a chance your sale takes much longer than you planned, in which case a faster route may be worth weighing. Our guide to selling a house fast lays out what that trade-off looks like.

Who should be most worried?

Not everyone is in the same boat. The people most exposed to the shelf-clearing of cheap deals are first-time buyers and anyone stretching to the top of their budget. They are the buyers who sit on the edge of lenders' stress tests. If your home is priced for that buyer, it's the most sensitive part of your market. Homes at the cheaper end (a small flat, a starter house) tend to draw those buyers, and so do the first rungs of a chain.

The least exposed are cash buyers and people with large equity from a previous sale. They don't care about swap rates. That's a quiet advantage in a market like this, and it's the reason serious cash purchasers keep operating when mortgage buyers pause. If you want to understand what that route involves, our page on cash house buyers explains it clearly, including what you give up in price for the certainty.

How are buyers reacting right now?

Some are waiting. Some are grabbing what they can. Moneyfacts analysts say the rise in fixed rates is deterring house buyers, though the article offers no direct quote or numbers on that, so treat it as informed commentary rather than a measured trend. What the RICS data does show is that enquiries and agreed sales are still negative, while the number of new sellers is rising slightly. More people want to sell than want to buy at the moment, which is the definition of a buyers' market.

Springall said borrowers who can secure a mortgage have "bargaining power on their side." She said it in the Nationwide commentary, but it describes the same situation. Buyers know they have options and they know you probably want to move. Expect more offers below asking, more requests for a price reduction after a survey, and more conditional offers that depend on the buyer's own sale.

The fixed-rate trap for buyers who already have a deal

There's a flip side that gets less attention. People whose fixed rate is ending soon are staring at a remortgage at far higher rates than they signed up for. Springall's advice is to seek advice and compare options early, and I'd add: if you're one of them and you were already thinking about selling, doing the sums on your new payment before you decide is worth an hour of your time. Sometimes the realisation that the new rate is unaffordable is what brings the decision forward. Sometimes it pushes you to a lender product you hadn't looked at. Either way, you want to know before the deadline, not after.

Also bear in mind that locking in a mortgage offer early can protect a buyer from further increases. Most offers last several months. If your buyer has one, ask. A buyer with a secured offer is a very different proposition from one still waiting to apply.

What should you actually do if you're selling this autumn?

I'll be practical here, because commentary is cheap and a sale is expensive.

Price for the buyer's mortgage, not for your hopes

Work backwards. If the likely buyer for your home needs to borrow £250,000, a payment of £1,611 a month at today's average five-year rate is what they have to be comfortable with. Overprice and you'll be shut out of the shortlist before anyone opens your listing. Get a realistic figure first with the how much is my house worth tool, then compare it against actual sold prices on your street, not asking prices.

Ask your agent hard questions about buyer finances

A sale agreed on paper is not a sale. Ask who the buyer's mortgage lender is, whether they have an agreement in principle, and whether the rate they assumed still exists. A buyer whose affordability was based on a deal that has since gone may come back asking for a lower price. Better to hear that before you've turned down other offers.

Think about speed as well as price

In a market where a deal can unravel because a lender repriced, the quickest sale often protects more of your money than the highest asking price. I'm not saying you should accept silly offers. I'm saying a bird in the hand has a value that's easy to underestimate when rates are moving every few days.

Keep your own financial position in view

If you're also buying, remember the same maths applies to you. Check how your next mortgage will look at 6% before you fall for a house. Many sellers have been surprised to find that a move they were comfortable with in spring now comes with a payment several hundred pounds higher.

What if my sale takes longer than I can afford?

This is the question I'd put to myself in your shoes, and it's the one many sellers avoid. Open-market sales take time at the best of times. In a market where lenders keep changing the deal, a sale can slip further or fall through on affordability grounds. If you have bills to pay, a deadline, or a property that's difficult to mortgage (short lease, non-standard construction, needs work), you may want a back-up plan.

Options include a cash buyer, a sale to an investor, or an auction, each with different trade-offs between price, certainty and speed. None is right for everyone. The point is to know what's on the table before you need it. The simplest way to see real figures is to compare offers side by side, which is exactly what our free valuation and comparison service is for. It costs nothing, and you're under no obligation to accept anything.

Will mortgage rates come back down?

Nobody knows, and I'd be wary of anyone who claims to. What we can say is that the drivers are external. Swap rates and gilt yields are responding to oil, global bond markets and inflation expectations. If the energy shock fades, as Nationwide's Robert Gardner hopes, pricing could ease and some of those 1,494 cheap deals could return. If it doesn't, and the Bank of England raises Bank Rate, they won't.

There's an odd upside to a market like this one. Wage growth has outpaced house price growth for some time, which Nationwide and Mortgage Advice Bureau have both flagged. Slowly, quietly, homes are getting more affordable relative to incomes, even as the mortgage rate headlines look grim. That's a medium-term story, not something that helps a buyer this month, but it's one reason surveyors are looking at flat prices over a year rather than steep falls.

If you're planning a sale across the next six to twelve months, my advice is to plan for rates staying roughly where they are, and treat any improvement as a bonus. That is a much safer basis for decisions than hoping.

The regional picture: does this hit everywhere equally?

The sources I've used give national figures, not a regional breakdown for this particular rate move, so I won't pretend to numbers I don't have. But the logic is easy to follow. Areas where homes are priced higher relative to local incomes need bigger mortgages, so a given rise in rate means a bigger rise in monthly cost. London and the South East are the obvious examples, and the table above shows that a £400,000 loan costs about £260 a month more than at the start of the year. Cheaper regions need smaller loans, so the same rate rise bites less in pounds, even if it still matters in percentage terms.

Whichever part of the country you're in, the best evidence is local: recent sold prices, how many similar homes are listed, and how long they have sat. National indices like Nationwide's, with an average price of £274,251, are useful for direction but useless for pricing your own property.

Is the "99%" headline as scary as it sounds?

Partly. It's a real and striking number, and it tells you lenders have repriced fast. But a few caveats keep it in proportion.

First, it counts products priced under 5%, not the whole market. Plenty of borrowers never qualified for those headline deals in the first place. Second, the count at the start of September was unusually high at 1,494; the comparison starts from a peak of cheap deals, which magnifies the percentage fall. Third, the average rate is what most people pay, and an average of 6.00% matters more than the count of rare cheap deals. Moneyfacts' own calculation, almost £2,000 a year extra on a £250,000 mortgage compared with the start of the year, is the figure I'd anchor on.

And the headline "mortgage rates hit 6%" can mislead too. It's the average five-year fixed rate. Someone with a 40% deposit may still find something noticeably cheaper than the average; someone with 5% may pay more. Averages tell you where the market has moved, not what your buyer will pay.

What do the experts say about where this leaves buyers and sellers?

Springall called a return of fixed rates to three-year highs "disastrous news for borrowers", and advised anyone reaching the end of a fixed deal to seek advice and compare options. That's her view and the tone fits a rate-comparison site. Oliver Dack of Mortgage Advice Bureau took a calmer line, saying lenders are still willing to lend and that the issue is affordability, with wage growth partly offsetting higher borrowing costs. Both can be true at once: the outlook is tough, and it's not a lending freeze.

The Bank of England's credit conditions survey, covered by The Negotiator, points the same way: availability of secured credit to households and demand for house purchase and remortgaging fell in the three months to the end of August, with a slight improvement expected in the following quarter. The Bank gave no percentages in that coverage, so I won't invent any. Propertymark's chief executive Nathan Emerson described the expected recovery in demand as encouraging, and said better access to finance "could provide an important catalyst" for confidence as the year ends. Pepper Money's Ryan McGrath summarised it as "caution on both sides of the market." I think that last phrase is the fairest one-line description of where we are.

My honest view

I don't think anyone should panic. A market where prices are flat, sales are slow and rates are high is uncomfortable, but it isn't a catastrophe, and the people who do best in it are the ones who price sensibly, prepare their paperwork and don't fall for the idea that next month will be better. Some sellers will keep chasing a figure their buyers can't borrow. They will watch their home sit and eventually sell for less than they'd have got in September.

If you're thinking about selling, decide what matters most: price, speed or certainty. You rarely get all three. Then use real numbers to test your options. Start with a realistic valuation, see what an open-market sale is likely to involve, and compare that against the alternatives. If you'd like to see how the offers stack up, you can start a free valuation in a couple of minutes and compare them side by side. No pressure, and no obligation to go ahead.

Sources: Moneyfacts (via Estate Agent Today, 9 October 2026, and moneyfactscompare.co.uk, 5 October 2026); RICS UK Residential Market Survey, September 2026 (via Estate Agent Today, 8 October 2026); Nationwide House Price Index, September 2026 (via Moneyfacts, 1 October 2026); Bank of England Credit Conditions Survey (via The Negotiator, 9 October 2026). Repayment table is Ready Steady Sell's own calculation.