The data from Rightmove found that the average rate for a five-year fixed rate at 60 per cent loan to value (LTV) has grown by 0.18 per cent over the last week, to a typical 5.59 per cent. Meanwhile the average over the same term for borrowers with a 15 per cent deposit has grown by a more modest 0.04 percentage points to 5.69 per cent.
A year ago, the average rates for these products stood at 3.34 per cent and 3.51 per cent respectively.
Matt Smith, mortgage expert at Rightmove, noted that rates overall are up by an average of 0.13 percentage points on last week. He added that while this is only marginally above the 0.12 percentage point growth seen the week before, the latest rises are “weighted much more towards shorter-term rather than longer-term fixed deals”.
For example, the average rate for a two-year fixed rate for borrowers with a 40 per cent deposit rose by 0.28 percentage points on last week to 6.09 per cent. Last year the average rate stood at 3.30 per cent.
Borrowers looking for a two-year fixed rate at 75 per cent LTV have seen the average rate rise by 0.15 percentage points over the week to 6.09 per cent, while at 85 per cent LTV it has grown by 0.15 percentage points to 6.21 per cent.
Smith continued: “With even the best-buy short-term fixed-deals now approaching six per cent, and the average mortgage rate across all two-year fixed LTV products now topping six per cent, it is likely to be a blow to those looking to take out a mortgage soon, and some may be having to reassess what they can afford or temporarily pause their plans.”
Despite the rate increases, Smith said that there was still a “healthy level of buyer demand”, with enquiries to view properties for sale above 2019 levels.
He added: “Many determined movers are navigating rather than stepping away from the market, with the gradual increase in mortgage rates we’ve seen over the last few weeks perhaps easier to manage than the sudden shock of the post-mini Budget period, when many products rose more than one per cent in a week.”
