UK mortgage rate rise outpaces interest rates, data reveals
The price of new mortgages is rising even faster than UK interest rates, according to new data that adds to the dilemma faced by many thinking about taking out a new loan on a home.
The financial data provider Moneyfacts said the average new two-year fixed rate had increased by 0.14% since the start of this month, and now stood at 4.09%. This is the first time the average figure has broken through 4% since early 2013.
In December 2021, the average new two-year fixed rate was priced at 2.34%, so it has risen by 1.75 percentage points since then. That means the typical cost of these deals is rising at a faster rate than official borrowing costs. Over the same period the Bank of England base rate has increased by 1.65 percentage points – from 0.1% in December 2021 to 1.75% now.
The average new five-year fixed rate has now reached 4.24%, a rise of 1.6 percentage points compared with December 2021, when the typical price was 2.64%.
At the start of this month, the average “shelf life” of a new mortgage deal – or the time it is available to consumers before it has to be altered or pulled – had fallen to a record low of 17 days, according to Moneyfacts.
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In the aftermath of the 0.5 percentage point interest rate increase on 4 August, many providers are continuing to reprice their offerings and pull their deals off sale, sometimes with very little notice.
It is estimated that between 1.3m and 1.5m fixed-rate mortgage deals arescheduled to end during 2022, and many of the people with these loans are worried about rising costs and keen to take out another fixed-rate home loan. The same applies to many
Read more on theguardian.com
