The average two-year fixed deal climbed by 0.35 percentage points to 2.71%, whilst the five-year fix rose to 2.78%
L&C’s remortgage tracker revealed that the average of the low LTV two and five-year remortgage rates from the top ten lenders have leapt again this month, posting the second biggest monthly rise this year.
The average two-year fixed deal climbed by 0.35 percentage points to 2.71%, whilst the five-year fix rose to 2.78%.
That is a sharp increase from the historic lows of last October when the average two and five-year fixed rates were at just 0.89% and 1.05% respectively. A borrower taking a typical £150,000 ($180,480.75) repayment mortgage over 25 years would face monthly payments £125-130 ($150.40-156.42) higher than at the low, adding up to a total of £1,500 ($1,804.81) more per year in payments than at last year’s low point.
Despite the increase in fixed rates, they remain at low levels in historical terms and remain much lower than the average standard variable rate (SVR) which currently stands at 4.51%, as lenders pass through recent base rate rises to their reversionary rates.
Switching from the SVR to the average two and five-year fixed rates could cut the monthly mortgage payment by at least £140 ($168.45), slashing the annual outgoing by more than £1,680 ($2,021.38). That saving could increase further if the Bank of England continues to raise rates, as many anticipate.
David Hollingworth, associate director at L&C Mortgages, said: The rate at which mortgage rates have been moving has been astonishing and many lenders have continued to make changes to their rates week in week out, making it difficult for borrowers to keep tabs on the market. With the cost of living continuing to rise, mortgage borrowers will be hoping that the Bank of England will decide to ease off but it makes sense to plan for more increases.
He said: With so many cost increases impossible to avoid, the mortgage remains an area where households can take positive action. Fixed rates understandably appeal to those looking to put some certainty into their single biggest outgoing. We’ve seen more borrowers looking to secure a rate further ahead of the end of their current deal, in an effort to get ahead of the increases.