Rates rise for mortgages

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Mortgage borrowers should act quickly as interest rates continue to rise, financial information company Moneyfacts has suggested.

Average rates on two and five year fixed rate domestic mortgage deals have risen for the fourth consecutive month, it reported.

‘A borrower looking to purchase a home with a 15 per cent deposit would need a mortgage deal at an 85 per cent loan-to-value, and the latest data due to be released in the Moneyfacts UK Mortgage Trends Treasury Report found that the average two year rate at this LTV now stands at 3.12 per cent. This is an increase of 1.01 per cent since July’.

The average two year fixed rate at 80 per cent LTV has increased by 0.54 per cent during this period to 2.67 per cent and the average five year rate at this LTV rose by 0.58 per cent to 2.96 per cent.

Since July the highest LTV offers of 90 per cent, 85 per cent, 80 per cent  and 75 per cent have all increased for two and five year fixed rates.

Rates are moving fast with the average shelf life for a mortgage product now just 28 days, the lowest since August 2018, said Moneyfacts.

Against this there were well over 100 more mortgage offers available in November than a in December although the total of 2,400 for both fixed and variable rate offers was less than half that available in March 2020. The biggest decline – from 780 to 50 – was in 90 per cent LTV offers.

‘Lenders are focusing their offerings towards traditionally lower-risk borrowers with a larger equity or deposit’, said Moneyfacts’ Eleanor Williams.