Average fixed mortgage rates creeping up
Some average mortgage rates are creeping upwards, despite the Bank of England leaving the base rate unchanged last week.
The typical two- and five-year fixed rates on the market have increased month on month for the first time since June 2021, according to Moneyfacts.co.uk.
It said overall average two- and five-year fixed rates rose by 0.04 percentage points month on month in November, reaching 2.29% and 2.59% respectively. In October, the average two-year fixed rate was 2.25% and the average five-year fixed rate was 2.55%.
The most significant re-pricing was in the 35% deposit bracket, it said.
Despite the recent increases, average rates for two- and five-year fixed deals are still lower than a year ago, Moneyfacts added.
There have already been signs that mortgage lenders are pricing in expectations that interest rates will soon rise, with many deals with ultra-low rates below 1% having disappeared in recent weeks.
The Bank of England left the base rate unchanged at 0.1% on Thursday last week, although there are expectations that an increase could come soon amid inflationary pressures including soaring energy costs.
In better news for borrowers, the choice of mortgage deals on the market has exceeded 5,000 for the first time since March 2020, when 5,222 deals were available.
Moneyfacts counted 217 more products on offer compared with last month, taking the total number of home loans available to 5,156.
Many mortgages were pulled last year amid the uncertainty caused by the coronavirus pandemic – and in a positive development for first-time buyers Moneyfacts said that low-deposit deals are among the most notable recent increases.
Eleanor Williams, a finance expert at Moneyfacts, said: “Seeking out independent financial advice to assess the changing market is vital to ensure the best possible deal can be secured considering the rate, associated fees and incentives.”
