Mortgage Rates Today: Why Borrowing Costs Are Rising Again in the US and UK
US 30-year rates hit 7.49%, a near three-year high, while the UK five-year fixed rate reached 6% on one measure. Here is what it means for buyers and refinancers.
Mortgage rates are climbing again on both sides of the Atlantic. In the US, rates reached their highest level in nearly three years. In the UK, lenders have been raising prices even though the Bank of England has not changed its base rate since December last year.
The result is a cooling market: fewer people are applying for loans, and refinancing has dropped sharply.
What the US numbers show
The Mortgage Bankers Association (MBA) said the average contract rate on a 30-year fixed loan with a conforming balance ($832,750 or less) rose to 7.49% from 7.30%. Points rose to 0.84 from 0.75 for loans with a 20% down payment.
Total application volume fell 4.2% on the week. Purchase applications slipped 2% and were 15% below a year ago. FHA purchase applications fell most, by 6%.
Refinancing took the biggest hit. Applications dropped 8% for the week and were 56% lower than a year earlier. MBA economist Joel Kan said very few homeowners have an incentive to refinance at these rates, which are roughly a percentage point above last year's.
More borrowers are turning to adjustable-rate mortgages (ARMs), which made up 10.3% of applications. ARMs start with lower rates but can adjust up or down after the fixed period, so they carry more risk. In the early pandemic years, their share was below 3%.
There was a small pause: Mortgage News Daily put its average at 7.56%, near its lowest in just over a week. Its Matthew Graham said it was too soon to say whether upward momentum is fading.
What the UK numbers show
Lloyds reported the average UK home cost £298,441 in September, about the same as a month and a year earlier. Economists had expected a 0.1% monthly rise. In August prices fell 0.3%, the first fall in three years.
Most big lenders have raised mortgage prices recently, citing turmoil in global bond markets. Lloyds mortgages director Andrew Asaam linked higher rates to changing expectations about the future path of the base rate.
Stonebridge found purchase mortgage applications fell 18.2% in the third quarter from a year earlier, and first-time buyer applications fell 18.6%. Remortgaging applications rose, which softened the overall decline.
A separate figure cited by The Independent, from the Bank of England, put the average five-year fixed rate at 75% loan-to-value at 4.98% at the end of September, the highest since 2023. Surveyors' body Rics reported weaker buyer enquiries, agreed sales and prices in September.
What it means for you
If you are buying, higher rates raise monthly payments and shrink budgets, which is why applications are falling. If your UK fixed deal is ending, the Guardian notes you face a costlier replacement. US homeowners with lower existing rates have little reason to refinance at present.
Rates change often, so compare lenders' current quotes rather than relying on weekly averages. The UK Budget this month is a further source of uncertainty for buyers and sellers, according to Knight Frank.
Also read Australian House Values Fall in 82% of Suburbs as Auction Clearance Rate Hits Three-Month Low
Quick answers
What is the average US mortgage rate today?
The MBA's latest weekly figure for a 30-year fixed conforming loan was 7.49%. Mortgage News Daily's separate survey showed 7.56% for the average lender.
Why are UK mortgage rates rising if the Bank of England has not raised rates?
According to the sources, lenders are pricing in expectations about future base rate moves, and bond market turmoil has pushed up their costs. The base rate has not changed since December last year.
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