House-hunters and homeowners looking to remortgage face higher costs this week as fixed rate mortgages continue to edge upwards.
According to financial experts Moneyfacts, the average two-year fixed rate mortgage has gone up by 0.02%, three-year fixes increased by 0.04%, and five-year fixes rose by 0.01% in the last week alone.
These increases are driven by “swap rates”, which are used by banks and building societies to price their mortgage products. And experts predict that rates will likely continue to rise in the coming weeks.
Big Banks Hike Mortgage Rates
Several big names on the high street have increased their mortgage rates. Barclays hiked rates on some of its products by as much as 0.20%, while Halifax increased rates by up to 0.05%.
TSB also jumped on the bandwagon, increasing rates by up to 0.15% and even withdrawing its three-year fixed rate range altogether.
Building Societies Follow Suit
It wasn’t just the big banks – building societies also flexed their rate muscles. Leeds Building Society increased fixed rates by up to 0.60%, West Brom by up to 0.14%, Suffolk by up to 0.25%, and Buckinghamshire by up to 0.20%.
Rate Rollercoaster – Ups and Downs
While many lenders hiked their rates, others opted for a mixed approach. Principality BS bumped up rates on some of its two-year fixed rate deals by 0.10%, but then went on to reduce rates on other fixed products by the same amount. Coventry BS followed a similar strategy, with some deals increasing by 0.15% while others were slashed by 0.30%.
Some “Eye-Catching” Deals Remain
Despite the general upward trend, there are still some good deals to be found. Moneyfacts highlighted a five-year fixed rate deal from Santander priced at 4.28% for purchasers with a 60% loan-to-value (LTV).
Expert Advice: Act Fast!
While there have been some rate cuts, these haven’t been enough to offset the overall upward trend. Rachel Springall, a finance expert at Moneyfacts, warns that “fixed mortgage rates are expected to rise over the next couple of weeks” and urges borrowers to act quickly.
“The deals that have disappeared this week may well resurface, but this does signal a message to that deals are not guaranteed to stay on the shelf for long.”