Remortgage rates are rising
Interest rates for those switching their mortgage deal have started to rise, said Moneyfacts, after it analysed the movement of remortgage rates over the last year.
Remortgagors have been able to benefit from some of the lowest rates ever seen, said the financial information provider, but after its latest number-crunching, it’s called time on the cheapest deals.
It reckons average rates available to those remortgaging have crept up in the past six months, with the average two-year fixed rate for those remortgaging now even higher than a year ago.
Two-year fixed rate remortgage products now average 2.58% compared to 2.56% a year ago. And while five-year fixed rates are still cheaper than they were last year, at 2.98%, they have crept up a little from their position six months ago (2.96%).
Charlotte Nelson, finance expert at Moneyfacts, said: “Rates have been on a downward trajectory for such a time that it has almost become the new norm. Those looking to remortgage today may therefore be shocked to see that some rates have witnessed a 0.14% increase in just six months. The average two-year fixed rate will cost borrowers £14.11 a month or £169.32 a year more today compared to six months ago, and with the talk of a Base Rate rise on the horizon there is no telling by how much more this could potentially rise.
“The uncertainty in the economy, combined with Base Rate speculation, has caused the need for providers to rethink their offerings and react accordingly. While the lowest rates in the market remain put for the time being, lenders have started to tinker with their products that are not in the spotlight.
“Borrowers should not be put off from remortgaging, however, as there are still savings to be made, particularly as the average SVR currently stands at 4.60%. And of course, the rate is not the only cost for borrowers to consider; they’ll want to be on the lookout for decent incentives and regularly check in on the Best Buys to see what is out there.”