The Moneyfacts average mortgage rate has jumped from 4.89% on 2 March to 5.50% on 25 March 2026. That's a 0.61 percentage point rise in just 23 days. Here's what that means for your monthly payment.

According to Mortgage Strategy, the typical annual cost of borrowing £250,000 over 25 years has risen by more than £1,400 a year - around £117 per month extra on your repayment. According to Adam French, Moneyfacts head of consumer finance (25 March 2026): "The Moneyfacts Average Mortgage Rate has hit 5.50% - heights last seen more than 18 months ago, marking another unwelcome milestone for borrowers this month."

Run the numbers on your deal

If you're mid-application or planning a purchase, this matters today. According to Mortgage Strategy, Santander increased rates by up to 53 basis points (a basis point is 0.01%) and Clydesdale moved by up to 78 basis points in response to the market shift.

The spike was driven by Middle East conflict shifting expectations around inflation and future rate decisions. Lenders are passing higher funding costs straight to borrowers.

What happens next

The last time the Moneyfacts average rate hit these heights was in August 2023, when rates peaked at 6.52%. We're not at that peak yet. But the 0.61 percentage point move in a single month is sharp.

If you're comparing deals, run the numbers on both your monthly payment and your total annual borrowing cost. The difference between 4.89% and 5.50% on a £250,000 loan over 25 years is more than £1,400 a year. You may wish to stress-test your deal assumptions at 5.75% now rather than wait. Speak to your broker about your timeline before rates reprice again.