Homebuyers are finding it harder than ever to secure a good mortgage deal. Rates have climbed again this week, making it even more difficult for buyers to get on the property ladder.
The average two-year fixed rate mortgage now stands at 5.99%, up from 4.89% last week. Five-year fixed deals are also up, sitting at 5.46% compared to 5.36% last week.
These rises follow the Bank of England’s decision to keep interest rates on hold at their 16-year high of 5.25% for the sixth month in a row. Experts predict that the Bank of England is unlikely to cut interest rates in June, which could mean further rises for mortgage rates.
Santander Cuts Rates, But Don’t Get Too Excited
One bright spot this week is that Santander has cut some of its mortgage rates. However, most other lenders have increased their rates or kept them the same.
To make matters worse, young homebuyers are increasingly taking on mortgages that last well into their retirement years. This is happening because the cost of buying a home has risen dramatically, while wages have not kept pace.
The Bank of England has seen a spike in mortgage terms that run past the state pension age, especially for buyers under 30.
Fewer Mortgages Approved
The number of new mortgages approved fell slightly in April, with 61,100 mortgages approved compared to 61,300 in March. Remortgages also fell from 33,500 to 29,000.
However, the total amount being borrowed increased to £2.4 billion, up from £0.5 billion in March. The average interest rate on new mortgages also rose to 4.74%.
Big Bank Mortgage Deals
Here’s a look at the current mortgage deals from some of the UK’s biggest banks:
HSBC
HSBC’s cheapest five-year deal is now 4.48%, up from 3.99% last week. Their cheapest two-year deal is 4.86% with a £999 fee.
The rates you get will depend on your individual situation, including your deposit. The more you put down, the better rates you’ll get.
NatWest
NatWest is offering one of the cheapest five-year deals on the market at 4.32% for a 60% loan-to-value mortgage, but you’ll need a £1,495 fee. They also have a special green mortgage deal at 4.42% for properties with an energy performance certificate (EPC) rating of A or B.
The cheapest two-year deal from NatWest is 4.82% with a £1,495 fee.
Santander
Santander has cut some of its rates. You can now get a five-year fixed rate mortgage at 4.28% with a 40% deposit. A two-year fixed rate with a 60% loan-to-value mortgage will cost 4.80% with a £999 fee.
Barclays
Barclays’ cheapest five-year deal is 4.41% with a £899 fee. Their cheapest two-year deal is 4.84%.
Nationwide
Nationwide’s cheapest five-year deal is 4.59% with a £999 fee for those with a 40% deposit. Their cheapest two-year deal is 4.84%.
Halifax
Halifax is offering a two-year fixed rate of 4.78% with a £999 fee for first-time buyers. Their cheapest five-year deal is 4.45% with a £999 fee.
These higher rates mean that buying a home is becoming increasingly expensive. If you’re looking to buy, it’s important to shop around and compare deals from different lenders. It’s also a good idea to speak to a mortgage advisor to get tailored advice.
A New Mortgage Deal for First-Time Buyers
Yorkshire Building Society is offering a new mortgage deal that could help first-time buyers get on the property ladder with just a £5,000 deposit. This could mean a 1% deposit for a property up to £500,000.
Will Rates Fall In 2024?
Most experts predict that interest rates will fall in 2024 as inflation eases. However, the pace of rate cuts is now uncertain, which could mean that mortgage rates remain high for longer.
It’s hard to say for sure what will happen with mortgage rates in the coming months. But one thing is certain: it’s more important than ever to do your research and find a mortgage deal that’s right for you.