Mortgage rates already on the up
Mortgage rates are rising and it’s first-time buyers facing the largest hikes, according to Moneyfacts.
The latest research from the financial information provider shows that while the average two-year fixed mortgage rate has risen in the past month, rates for those borrowing 95% of the property’s value have been the hardest hit.
They have increased 0.10% from September, compared to just a 0.03% rate hike for borrowers with a large 40% deposit.
The average two-year fixed rate for those with just 5% upfront – usually first-time buyers – is now 4.26%, compared to 4.14% six months ago.
Borrowers with a large 40% deposit will pay an average 1.69%, up slightly over the month, but still lower than six months ago (1.83%).
Charlotte Nelson, finance expert at Moneyfacts.co.uk, said: “The recent upward turn in rates is apparent across the mortgage market, however first-time buyers seem to have been hardest hit, seeing rates shoot up by 0.10% in just one month. This is disappointing news especially considering these borrowers could potentially have to factor in another rate increase if base rate rises as speculated.
“Many first-time buyers will be frustrated by the news that rates are rising while base rate has yet to do so. However, it goes to show that we don’t necessarily need to see a base rate rise for interest rates to increase.”