Average two and five-year fixed rates breach 6%
The average two and five-year fixed rate have now breached six per cent, a return to post mini-Budget levels.
According to Moneyfacts, as of today, the average two-year fixed rate is 6.47% and the average five-year fixed rate is 6.01%. The firm said that this was an increase from 6.42 per cent and 5.97 per cent the previous working day.
Moneyfacts continued that there were currently 4,404 residential mortgage products available on the market, which is an increase from 4,396 on the previous working day.
On the buy-to-let side, the average two-year buy-to-let residential mortgage is 6.63%, up from 6.59% the day before. The average five-year buy-to-let residential mortgage rate stands at 6.48%, up from 6.43% on the last working day.
Moneyfacts said that there were 2,417 buy-to-let mortgage products available, down from a total of 2,451 on the previous working day.
It added that today’s average two-year tracker was 5.96%, which is in line with the previous working day. The average standard variable rate is 7.67%.
Mortgage rates have been climbing over the past few weeks due to sticky inflation figures and base rate increase leading swap rates, which are based in predictions of interest rates and are used by lenders to price their products, to increase leading to widespread repricing and temporary withdrawal of products.
‘A gut punch for borrowers’
Myron Jobson, senior personal finance analyst, interactive investor, said: “The sudden surge in mortgage rates has been jarring for borrowers, and the latest uptick spells even more mortgage misery. It is a gut punch to the around 800,000 households with a fixed rate mortgage deal set to expire in the second half of this year. Higher mortgage rates means borrowers end up shelling out more in interest over the life of their loans. This translates into higher monthly mortgage payments which would weigh heavily on homeowners already struggling to battle the inflationary beast in other areas of expenditure like food bills.
“Many borrowers will be desperately rubbing their figurative crystal ball to get an idea of where mortgage rates are heading in the not-too-distant future. When interest rates are on the rise, deciding between a short or long-term fixed-rate mortgage deal requires careful consideration. Ultimately the decision between a short or long-term fixed-rate mortgage depends on your individual circumstances. It is worth consulting a mortgage adviser to explore your options.”