Tue 17 Jun 2008
Fixed-rate mortgages at highest rate in a decade
The cost of the average fixed-rate mortgage has hit its highest level for 10 years as lenders pass on rapidly rising borrowing costs.The average new two-year fixed rate hit reached 6.75% yesterday, according to Moneyfactsco.uk. Furthermore, the average long-term – five-year – fixed rate package has also become more costlier, rising to 6.72%. Yet this time last year, it was possible to take out a fixed-rate mortgage for around 5.5%.
Many lenders have increased their fixed mortgage rates in recent days due to concerns over rising inflation, which has in turn forced-up the cost of borrowing through the money markets.
Lloyds and Nationwide increased their standard range of deals by 0.3% and 0.5% respectively, while Woolwich withdrew its entire range of fixed-rate products. A number of other lenders are now expected to follow suit and raise rates over the next few weeks.
Ray Boulger (pictured) of John Charcol, the mortgage broker, commented: “After the huge rise in swap rates last week, I expect more lenders to reprice their fixed rates.
“Once all lenders have repriced, fixed rates may have got to the level where unless you really need the security, you have to question if it is worthwhile buying one.”
The inflated fixed-rate mortgage rates is likely to have an adverse affect on consumer confidence and concern borrowers who are wanting to tie into deals that offer greater certainty in the existing market.
Posted by Marc Da-Silva
in John Charcol, Llodys TSB, Nationwide, News, Ray Boulger on Tue 17 Jun 2008
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