US housing researchers hoped 2026 would bring cheaper mortgages. For a few months it did. Then war with Iran unsettled bond markets, and rates in both countries turned back up. In the US, the average 30-year fixed mortgage reached 7.03% on September 24, 2026, according to Freddie Mac. In the UK, Which? put the average two-year fix at 5.63% and the five-year fix at 5.66%.
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How the US rate passed 7%
The 7.03% reading was the first above 7% in 20 months, since January 2025. NPR notes that the round number means nothing in itself beyond its effect on buyers’ nerves. What matters is the climb behind it. US rates had dropped under 6% by the end of February before rising sharply from March.
American mortgage rates tend to track the 10-year Treasury note. That yield rose over the summer on worries about high inflation and the size of the federal debt. The Federal Reserve then raised its benchmark rate by a quarter of a percentage point, its first move of the year, and many of its policymakers projected one more rise before the year ends.
The housing market has felt it. The National Association of Realtors reported that existing home sales fell 2% in August from July. The median existing home sold for about $429,000, and on that price one extra percentage point on the rate adds hundreds of dollars a month.
Why UK rates rose with no rate rise
The Bank of England has held its base rate at 3.75% since December. UK mortgages got dearer anyway. Which? says lenders now expect the base rate to fall more slowly than they once thought, and that shift pushed pricing up.
Sam Wilson, the mortgages expert at Which?, traced the summer. All ten of the largest lenders cut rates between late June and mid-July. Since mid-July many big providers have raised them again, as renewed fighting in the Middle East made fixed-rate deals costlier to offer. His point was that events abroad move mortgage rates, and not only decisions by the Bank of England.
Rightmove’s own tracker, built on Podium data from 21 lenders, gives a lower average of 5.06% for a two-year fix. Its property expert Colleen Babcock said that figure stood at 4.25% before the war began and peaked near 5.43% in April.
What happens next
Wilson set out both paths. If the conflict deepens and energy prices rise sharply, rate increases may continue. If tensions ease, lenders could bring rates down slowly.
In the US, investors are bracing for more rate rises from the Fed to fight inflation. Rightmove works out that its 5.06% average means a monthly repayment of £1,717 on an average asking price of £364,999.
