You are here: Home - News -

Two-year fixed rate sees highest rise in eight years – Moneyfacts

by:
  • 06/11/2017
  • 0
Two-year fixed rate sees highest rise in eight years – Moneyfacts
According to Moneyfacts, the average two-year fixed mortgage rate has seen a 0.12% rise between October and November -- the highest monthly raise in eight years.

From its historic low of 2.21% in October, Moneyfacts has revealed that the average two-year fixed mortgage rate has risen by a considerable 0.12%, to 2.33% — representing the biggest monthly increase since August 2009.

Charlotte Nelson, finance expert at Moneyfacts, said: “Since the start of October, 49% of lenders have increased their rates in some shape or form, with providers preparing for a base rate rise that was seen as a sure thing. The recent base rate rise is likely to only add fuel to the fire and cause rates to rise particularly in the variable rate market.”

The data was drawn from the Moneyfacts UK Mortgage Trends Treasury Report — yet to be published — and comes in the wake of a 0.25% base rate rise to 0.5% this November, which was expected to trigger a wave of reactionary increases in mortgage rates.

 

Wiped out cuts

However, Nelson noted that the size of the increase has “essentially wiped out any rate cuts that have occurred in the last six months.”

“The speculation surrounding the announcement on 2 November saw interest Swap rates rise significantly, with providers having little choice but to factor this into their pricing,” said Nelson.

“Following the two and five-year Swap rates going up by similar amounts, the average five-year fixed mortgage rate has increased in the same dramatic fashion, having risen by 0.12% from 2.76% in October to stand at 2.88% today,” she continued.

The average two-year fixed mortgage rate dropped from 2.34% in November 2016 to 2.30% in May this year, which was slashed again to 2.21% by this October. The average rate is now sitting just below that of November 2016.

“With rates on the rise even before base rate rose, borrowers should use this as a catalyst to sort out their mortgage,” Nelson said, adding: “any borrower sitting on their standard variable rate or coming to the end of a deal should remortgage as soon as possible to avoid disappointment in a market where rates are rising.”

There are 0 Comment(s)

Comments are closed.

You may also be interested in

  • RT @OTJournalist: AFAIK, 2018 is first year we have a good idea of *complete* mortgage lending market total. According to @UKFtweets: £267…
  • RT @PMbuytolet: 20% of landlords said they cut costs to stay profitable since the recent tax changes in an ongoing poll by @mortgagesols.…

Read previous post:
Shawbrook tightens stress rate and lending criteria

Shawbrook Bank has tightened its lending criteria on both first and second charge mortgages.

Close