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Average Mortgage Fixed Rates Rise

Average Mortgage Fixed Rates Rise

New data reveals that the average two and five-year fixed rates rose to the highest level for four months. What does this mean for the broader mortgage market and, more importantly, property investors in the UK?

New data from Moneyfacts reveals that, on average, mortgage interest rates rose by 0.04% to their highest levels in four months. The average two-year fixed is now 2.29%, and the five-year fixed is 2.59%.

While still down on pre-pandemic levels, when the average two-year fixed was 2.45% and five-year fixed 2.75%, we’ve seen significant rises in mortgage rates at 75% and 65% LTV. The latter saw the highest increases (0.39%), resulting in the average two-year fixed at 65% LTV now 2.5% and five-year fixed 2.7%.

According to a Moneyfacts spokesperson, Eleanor Williams, the competition in the mortgage sector had resulted in record-low rates as lenders competed for low-risk business from high deposit or equity borrowers. However, this is changing as lenders increase rates, undoubtedly due to the rise in SWAP rates.

 

What does this mean for property investors?

The increase in average two and five-year fixed mortgage rates is yet another indicator that the cost of mortgages is rising. Eleanor Williams said: “...borrowers may consider this an opportune time to explore securing a new deal, as there is no guarantee that rates will not continue to increase in the months to come. Seeking out independent financial advice to assess the changing market is vital to ensure the best possible deal can be secured considering the rate, associated fees and incentives.”

As most buy to let mortgage lenders honour offers for up to 6 months, anyone with a remortgage in the first half of 2022 should seriously consider their options now to secure a competitive rate before the increase progresses any further.

To secure your next buy to let mortgage rate, give me a call on 01732 471651 or email me at jamesp@mortgagesforbusiness.co.uk, and I’ll be happy to help.

NB: ANY PROPERTY USED AS SECURITY, WHICH MAY INCLUDE YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE