Following the release of mortgage interest rate date from the Bank of England, Hina Bhudia, partner at Knight Frank, said the gradual monthly increase of mortgage interest rates was a “worrying trend”.
Average two-year fixed rates climbed in all loan to value (LTV) brackets in October despite the base rate remaining static since it was dropped to 0.1 per cent in March.
Furthermore, average two-year fixes have risen every month since April in the 90 per cent and 85 per cent LTV brackets, and since June for 95 per cent deals.
Since March, 95 per cent LTV deals rates have risen from 3.02 per cent to 4.90 per cent, 90 per cent deals have risen from 1.94 per cent to 3.55 per cent and 85 per cent deals have risen from 1.69 per cent to 2.97 per cent.
Hina Bhudia, partner at Knight Frank Finance, said: “The upwards march of average mortgage rates is a worrying trend for homeowners everywhere and comes just a day after the Bank of England opted to hold the base rate at a record low 0.1 per cent.
“Lenders continue to raise rates in order to avoid being the cheapest on the high street amid the busiest mortgage market since October 2007. Many have been swamped with new business as they grapple with the effects of the pandemic, including the closure of many international call centres as governments introduce new lockdowns.
“The property market will remain open during lockdown and is likely to remain busy as a result.
“That means rates are likely to continue to climb over the short term, so borrowers should seek to secure a competitive rate as soon as possible. Mortgage offers are generally valid for up to six months, so you can revisit if the situation changes.”