Rightmove’s analysis of average mortgage rates noted that pricing had increased in the last few days.
Rates have risen by as much as 0.05 per cent in the last three days as the data showed the average two-year fixed mortgage rate at 60 per cent loan to value (LTV) was now 4.66 per cent, compared to 4.64 per cent on 23 May. The average five-year fixed rate at the same tier is now 4.31 per cent, up from 4.28 per cent.
At 75 per cent LTV, the average two-year fixed rate is 0.02 per cent higher at 4.76 per cent, while the average five-year fix has crept up by 0.03 per cent to 4.44 per cent.
At 85 per cent LTV, the average two and five-year fixed rate has increased by 0.02 per cent apiece to 4.92 per cent and 4.58 per cent. The same difference was recorded at 90 per cent LTV, with a two-year fix now at 5.15 per cent on average, and a five-year fix at 4.81 per cent.
Larger increases were seen at 95 per cent LTV, where the average two-year fixed rate rose by 0.05 per cent to 5.65 per cent, and the average five-year fixed rate increased by 0.04 per cent to 5.19 per cent.
More rises expected
This comes as SONIA swap rates, which influences mortgage pricing, crept up.
Nationwide was the first major lender to react by putting its mortgage rates up by as much as 0.45 per cent. Other specialist and buy-to-let lenders have also withdrawn their products with the aim of relaunching at higher rates in a few days.
According to Chatham Financial as of 12pm today, the two-year swap rate was 5.108 per cent while the five-year swap rate was 4.563 per cent. This is up from 5.039 per cent and 4.488 per cent yesterday.
It also follows the prediction that the base rate could reach 5.5 per cent to tackle high inflation.
Matt Smith, mortgage expert at Rightmove, said: “It’s early days, but we’ve seen the first major lender significantly increase rates and it’s likely that we’ll see other lenders follow suit, though the full impact may take a few weeks to filter through. An increase in fixed rates was likely to happen following the news earlier in the week that inflation had not fallen as much as markets had predicted.
“Subsequently, the underlying costs of mortgages to lenders has increased and it appears they’re now starting to pass this on through their fixed deals. We’ve seen average rates creep up from where they were earlier in the week and we expect some further increases in the coming weeks.”
He added: “Though the upward trajectory of mortgage rates will understandably be concerning to those thinking of moving soon, it’s important to remember that right now rates are still lower than they were on average in February before edging down in March and April, and there are likely to be more twists and turns to come with the ongoing uncertainty over inflation.”
