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More mortgage incentives expected as lenders hold rates low – SPF Private Clients

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  • 09/11/2018
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More mortgage incentives expected as lenders hold rates low – SPF Private Clients
Two-year mortgage rates stood at 2.5% in November, following the Bank of England rate hike in August.

 

The average two-year fixed rate slightly climbed compared to last month, according to the latest figures released by Moneyfacts.

In the last five business days, the average two-year mortgage rate has slightly risen by up to 0.02%.

However, the average two-year fixed rate has increased by up to 0.2% in the last 12 months, from 2.3% in November 2017 when it reached its lowest level.

The Bank of England kept the interest rates on hold in September, after raising the base rate to 0.75% in August.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said that with transaction levels subdued as buyers and sellers sit on their hands until Brexit is resolved, lenders were competing for a limited amount of business.

He added: “In order to attract borrowers, they must be competitive, which is why many have absorbed the increases in base rate, rather than pass these on to customers.

“However, there is only so far lenders can compete on rate which is why we have also seen an increase in mortgage incentives, such as free valuation and legal fees, and cash back, as well as other quirks such as Halifax’s competition whereby three borrowers will have their mortgage paid off.

“We expect more of this in coming months and are not expecting mortgage rates to rise significantly.”

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