Average rates on two- and five-year deals both increased by 0.02% to 4.98% and 5.02% respectively in October

Fixed rate mortgage deals have got more expensive month on month for the first time since February in an ominous new trend for homeowners.

Although the increases are small the turnaround marks an unwelcome new direction for the home loans market after rates dropped through most of 2025 on anticipation of a succession of rate cuts from the Bank of England.

Some market leading fixed rates for borrowers with the biggest deposits dropped below 4%.

However, those hopes have had to be reined in because of a new spike in inflation over recent months.

According to analysts Moneyfacts average rates on two- and five-year deals both increased by 0.02% to 4.98% and 5.02% respectively in October. The last month-on-month rate increase was recorded at the start of February.

At the start of October last year, the average five-year fixed rate was 5.07%; just 0.05% higher than the current rate.

However, the average two-year fixed rate has declined by 0.42% over the same period, down from 5.40% to 4.98%.

Fixed rate mortgages have to be refinanced at the prevailing market rate when they reach the end of their term.

Rachel Springall, finance expert at Moneyfacts, said: Borrowers may well be disappointed to see fixed mortgage rates on the rise.

Volatile swap rates and a cautionary approach among lenders have led to an abrupt halt in consecutive monthly average rate falls, she said.

She added: Inflation is expected to peak at 4%, which would then be double the desired 2% target, so any imminent base rate cuts by the Bank of England seem unlikely.