Mortgage Rates Just Hit 6%. We Checked Where Buying Still Beats Renting

Good morning,

On Monday, something happened that we haven't seen in three years.

The average five-year fixed mortgage hit 6%.

At the start of September there were 1,494 fixed deals under 5%. By Monday there were nine. Nine. (Moneyfacts via Mortgage Solutions)

So I wanted to answer the question every renter I know is asking: is buying still worth it, or is renting now the smarter move?

I checked 316 areas to find out.

Let’s dive in.

In this newsletter, you'll find...

• The rent vs buy line just moved

• If you remember one thing, make it this

• Feedback

The rent vs buy line just moved

Quick recap on why.

The Iran war pushed energy prices and inflation up, so 30-year gilt yields (basically the government's borrowing rate) hit their highest level since 1998 (Reuters).

Banks price mortgages off that. So your mortgage gets dearer too.

The test I ran

For every council area in England and Wales, I took two official numbers:

• What the average first-time buyer paid (Land Registry)

• What the average renter pays each month (ONS)

Then I asked: with a 10% deposit and a 25-year mortgage, is the monthly payment cheaper than rent?

Here's what came back:

• At 4% (January): buying was cheaper in 92 areas

• At 5.2% (September): 19 areas

• At 6% (now): 4 areas

Four. Out of 316.

What that looks like in real life

Take Sheffield. Average first-time buyer home: about £194,000. Average rent: £929 a month.

In January, at 4%, the mortgage would have been £922 a month. Same as rent, except you'd own the place.

At 6%, it's £1,125. Roughly £200 a month more than renting.

Same house. Same street. Only the rate changed.

Sheffield isn't alone. 88 areas, including Leeds, Liverpool, Birmingham and Manchester, have flipped from "buying is cheaper" to "renting is cheaper" since January.

The four places still winning

At 6%, buying still beats renting in Newcastle, Bristol, Southampton and Portsmouth.

Newcastle is the standout. A typical first-time buyer mortgage there is about £1,054 a month, against £1,207 in rent.

That's around £150 a month in your pocket, and rates would need to pass 7.5% before it flips.

That 7.5% is Newcastle's "break-even rate": the mortgage rate where buying and renting cost the same. Every area has one. Across the country, the typical one is just 3.3%.

Before you give up on buying

Part of every mortgage payment pays off the loan. That money stays yours. Rent doesn't do that. Count only the interest, and owning is still cheaper in 131 areas.

Also, the ONS rent figures include people on older, cheaper rents. If you're moving today, you'll probably pay more, which makes buying look slightly better than my numbers suggest.

So what do you do with this?

If you're renting and saving:

1. Find your area's break-even rate. Reply and I'll send you the full list.

2. Compare it with today's rates. If rates are well above it, don't panic-buy. Keep saving, because a bigger deposit gets you a better rate.

3. Be careful stretching to a 35-year mortgage to make the maths work. Lower monthly payments, but far more interest overall.

If you're an investor, the same squeeze hits you. Lenders usually want rent to cover 125% of your mortgage interest.

At 4%, almost every area passed that test. At 5.5%, only 177 of 316 do. Check this before you make an offer, not after.

(My workings: July 2026 prices and rents, 25-year repayment mortgage.)

If you remember one thing, make it this

Renting isn't "dead money", and it isn't automatically the smart move either. It comes down to one number: your area's break-even rate.

Right now, in most of the country, mortgage rates are well above it.

The Budget lands on 28 October, and the Bank of England meets on 5 November. If rates fall, many of these areas flip back quickly. I'll be tracking it.

Is it cheaper for you to rent or buy right now? Hit reply and tell me. I'd genuinely like to know.