With another base rate rise around the corner, borrowers coming to the end of their term or sitting on a standard variable rate need to act now, while low rates are still available.
Mortgage rates change daily but ahead of an anticipated base rate rise next month, reports are suggesting that the market is on the increase. According to Moneyfacts, the two-year fixed mortgage rate has reached a 19-month high and while this may be due to numerous factors, borrowers seeking a new mortgage are being urged to lock into a low rate while they still can.
Two-year fixed increases by 0.04%
Charlotte Nelson, finance expert at Moneyfacts, reports that the two-year fixed rate average has increased by 0.04% compared to last month, now sitting at 2.43%. She states: “After months of stagnation, March and April’s increases in the average two-year fixed rate have now effectively cancelled out any rate reductions that may have occurred in the last 19 months.”
SWAP rate rise affecting rates too
Lenders are also at the mercy of the increasing SWAP rate, which means that it is getting more expensive for them operate. The SWAP rate is at its highest value since August 2015 at 1.11%, which means many providers are forced to increase mortgage rates.
Withdrawal of 60% LTV products
Moneyfacts also suggest that the fall in the number of 60% LTV products available, to 495, has affected the two-year mortgage rate. In the past few years this has been a booming market for lenders; however, it is likely that in the face of another base rate rise, providers are taking their most popular or riskiest products off the market in anticipation.
Borrowers coming to the end of a deal or sitting on their lender’s standard variable rate now need to move fast if they want to secure a low rate deal. While it seems the two-year fixed rates are on the increase, borrowers could consider choosing a longer fixed term with rates still remaining low by comparison for now.
