Fixed and variable rates have been increased by several lenders, so mortgage-hunters should look to grab a deal
Mortgage rates are creeping up, and whether you are sitting on your lender’s standard variable rate (SVR) or a homebuyer looking for a deal, you need to proceed with care.
A string of lenders, including Halifax, Bank of Ireland and Clydesdale and Yorkshire banks, have increased their standard variable rates despite there being no change in the Bank of England base rate. Earlier this month the Co-operative Bank’s standard rate rose by 0.5% to 4.74% from 1 May.
It is thought at least a million borrowers are affected by these rises, which have been blamed on changing conditions in the mortgage market and the increased cost of funding.
Meanwhile, average rates on new two and five-year fixed-rate deals have nudged up, according to research by price comparison site Moneysupermarket.com.
It found the typical rate for two-year fixes was 3.82% in October 2011, but is now 4.15%. Similarly, five-year fixed rates averaged 4.57% in January this year, but this has crept up to 4.72%. For two-year base-rate tracker loans, the average rate now stands at 3.63% compared with 3.37% last summer.
“Anyone looking for a mortgage, or whose deal will end in the next few months, should act sooner rather than later to secure one of the current rates in case they rise further,” says Clare Francis at Moneysupermarket.com.
Lenders offering best-buy two-year and five-year fixes at 90% include First Direct (4.19%) and Nottingham building society (4.74%) respectively, while those at 95% include Newcastle building society’s two-year fix at 5.65% and Leeds building society’s five-year fix at 5.99%, according to Moneyfacts.