The chart below should be helpful for visualising where mortgage rates may be heading and for what duration. In the top left quadrant you have a comparison of central bank rate hike forecasts as of last Friday (solid lines) versus same forecasts 3 months prior (dotted lines).
This should be helpful for someone trying to decide on duration between a 2 / 5 / 7 / 10 year or longer fix. Obviously forecasts aren't reality and forecasts could change as circumstances change.
You can see that the updated forecast has UK bank rates to rise by another 3 - 3.5% (goes off top of box) within the next 12 months, and to remain elevated around 3% higher than today for 24 months. Then a slow decline, starting around 2 years from now, to a level around 1.5% above the current rate 5 years from now. Note these changes are in addition to current central bank rates (2.25% today in the UK). In other words the forecast is for the UK bank rate to be around 3.75% 5 years from now. Mortgage rates obviously charge a premium in addition to bank rate.
The EU looks high for longer but they're starting from a lower rate (of 1.25% today). So the net effect after 5 years is that both UK and EU end up at around the same interest rate (of 3.5 - 3.75%). UK drops more and sooner but from a higher base.
Something that could alter the forecast upwards further would be further and deeper global commodity supply shocks than we already have but not at a rate of change that shocked the system beyond coping. Something that could alter the forecast downwards would be a massive rapid shock to the western financial system that resulted in QE stimulus in the form of bond-buying by the western central banks to prevent total meltdown of the economy.
Note the EU's '
TPI tool' as first defence against 'disorderly market dynamics. And the UK's recent bond-buying action...