Average two- and five-year fixed mortgage rates continue to climb above 6%

Average two- and five-year fixed mortgage rates continue to climb above 6%

Analysts suggest that average two- and five-year fixed mortgage rates continue to climb above 6%.

Across all deposit sizes, the average two-year fixed rate mortgage in the market on Monday had a rate of 6.31%, Moneyfacts.co.uk found.

The average five-year fixed rate was 6.19%.

Two-year fixed rates crossed the 6% mark last week for the first time since 2008.

Five-year fixed mortgage rates hit 6% last week for the first time since 2010.

The choice of residential mortgage products is gradually improving, after many transactions disappeared as lenders reacted to market volatility resulting from the mini-budget.

There were 2,905 trades in the market on Monday, down from 2,533 on Friday.

However, there are still around 1,000 fewer mortgage products to choose from than there were on mini-budget day, when the total was 3,961.

Many deals disappeared from the market amid the fallout from the recent mini-budget.

The increases in the Bank of England’s key interest rates in recent months, in a context of soaring inflation, have also had an impact.

(PA graphics)

The base rate is expected to increase further.

Last week Moneyfacts calculated that, based on Thursday’s rates, someone with a £200,000 mortgage paying it off over 25 years could end up paying around £5,000 a year more for a fixed rate deal of two years since it would have done last December.

Rachel Springall, finance expert at Moneyfacts.co.uk, said: “Mortgage interest rates continue to rise, so it would be wise for borrowers comparing fixed offers to seek advice to see what options are available to them. .

“Mortgage products are starting to return after lenders temporarily withdrew offers amid interest rate uncertainty, but there is still a long way to go from the level of choice seen before the mini-budget.

“Consumers need to carefully consider whether the time is right to buy a home or mortgage, or wait and see how things change in the weeks ahead.”

In addition to dealing with rising costs, rising mortgage rates could also make it harder for borrowers to pass lenders’ affordability checks, narrowing the options available to them.

Speaking earlier on Monday on ITV’s Good Morning Britain, consumer champion Martin Lewis, who was answering questions from viewers, called for the creation of a ‘mortgage contingency plan’.

He said: “If you look at, regulator, Bank of England, government, you need a mortgage contingency plan now, or there’s a ticking time bomb, that’s my opinion.”

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