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Five-year mortgage rates hit highest level since 2016

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  • 12/11/2018
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Five-year mortgage rates hit highest level since 2016
Mortgage rates on five-year fixed deals have surged to a two-year high, according to analysis.

 

The typical deal is now priced at 2.95%, a level not seen since December 2016, Moneyfacts found.

Month-on-month rates have nudged up by 0.04% from 2.91% in October, and are up 0.17% from 2.88% in November 2017.

Providers have kept rates competitive since the base rate increased to 0.75% in August, but the tide has now started to turn.

However, the tide has now started to turn.

Demand for five-year fixes has grown in recent months, as borrowers seek to lock into deals against a backdrop of a rising base rate.

Darren Cook from Moneyfacts, said: “It seemed to be only a matter of time before providers increased their five-year fixed rates, as lenders could not continue to absorb the extra costs as a consequence of the base rate increase indefinitely, with many lenders having reassessed their options.

“Despite this, the pressure to remain competitive is far greater, and this is shown by the rate only increasing by 0.04% this month and by just 0.08% since the beginning of the year, up from 2.87%.”

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