Homeowners considering remortgaging were today urged to move fast as fixed rate mortgages start to nudge higher.
High street lenders have increased the cost of 36 mortgage deals during the past month, compared to rises on just six products in January, as they prepare for a rise in the official cost of borrowing.
High street lenders have increased the cost of 36 mortgage deals during the past month, compared to rises on just six products in January, as they prepare for a rise in the official cost of borrowing.
Increases have been made by a number of major banks, including Lloyds, Halifax, first direct and Santander, while other groups have withdrawn some deals completely.
The price hikes have led to the average cost of a two-year fixed rate mortgage for borrowers with a 40 per cent deposit rising to 1.86 per cent, up from 1.81 per cent at the beginning of July, according to financial information group Moneyfacts.
Typical prices on five-year deals for people borrowing up to 60 per cent of their property’s value have also risen, to stand at 2.59 per cent, compared with 2.54 per cent a month ago.
The group said it was the first increase in the average rate charged to borrowers with a large deposit for 12 months.
The price hikes have led to the average cost of a two-year fixed rate mortgage for borrowers with a 40 per cent deposit rising to 1.86 per cent, up from 1.81 per cent at the beginning of July, according to financial information group Moneyfacts.
Typical prices on five-year deals for people borrowing up to 60 per cent of their property’s value have also risen, to stand at 2.59 per cent, compared with 2.54 per cent a month ago.
The group said it was the first increase in the average rate charged to borrowers with a large deposit for 12 months.
The rise in mortgage rates comes as little surprise, after Bank of England governor Mark Carney recently warned that the Bank Rate could start to increase at the turn of the year.
Today’s news on mortgages comes as the Bank’s Monetary Policy Committee begins its two-day interest rate-setting meeting.
Commentators have predicted that up to three members of the committee could vote for a rate hike this month, although the majority of the committee is expected to vote to keep interest rates on hold at their current record low of 0.5 per cent.
One pundit, urged any borrowers who were still sitting on their lender’s standard variable rate to move fast and remortgage before the cost of fixed rate deals rose further.
Saying: “People with higher loan to value mortgages need to try to fix onto a good rate now.
“Mortgages that are seen to be more high risk will be the ones lenders look to re-price first.”
But added that while lenders had increased rates on 36 mortgages during the past month, some had continued to cut the cost of their loans, and there were still good deals available.
A 0.25 per cent increase in the Bank Rate would increase repayments on a variable rate £150,000 mortgage by around £17 a month or £204 a year.
But in his recent speech Carney implied the Bank Rate could be increased to 2.25 per cent over the medium term.
Today’s news on mortgages comes as the Bank’s Monetary Policy Committee begins its two-day interest rate-setting meeting.
Commentators have predicted that up to three members of the committee could vote for a rate hike this month, although the majority of the committee is expected to vote to keep interest rates on hold at their current record low of 0.5 per cent.
One pundit, urged any borrowers who were still sitting on their lender’s standard variable rate to move fast and remortgage before the cost of fixed rate deals rose further.
Saying: “People with higher loan to value mortgages need to try to fix onto a good rate now.
“Mortgages that are seen to be more high risk will be the ones lenders look to re-price first.”
But added that while lenders had increased rates on 36 mortgages during the past month, some had continued to cut the cost of their loans, and there were still good deals available.
A 0.25 per cent increase in the Bank Rate would increase repayments on a variable rate £150,000 mortgage by around £17 a month or £204 a year.
But in his recent speech Carney implied the Bank Rate could be increased to 2.25 per cent over the medium term.
A hike of this level would cost households with a £150,000 mortgage an extra £126 a month or £1,512 a year.
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