Homeowners have been dealt a fresh blow after experts warned key mortgage rates could rise above 6 percent again next week.
More than 20 lenders have raised their mortgage rates this week, taking some of the most competitive home loans off the market, including several offers below 5 percent.
The cost of borrowing has been rising since Bank of England officials signaled last week that a long-awaited rate cut would be further delayed.
Yesterday Santander increased its mortgage rates up to 0.26 percentage points for the second time in four days.
The move follows increases at NatWest, Halifax and Nationwide, which also raised the prices of their fixed-rate purchase agreements and remortgages by up to 0.25 percentage points.
More than 20 lenders have raised their mortgage rates this week, taking some of the most competitive home loans off the market.
The cost of borrowing has risen since Bank of England officials (pictured) signaled last week that a long-awaited rate cut would be further delayed.
Around 1.6 million borrowers with fixed rate deals will need to remortgage this year, according to UK Finance, the industry trade body (file photo)
Now, the average two-year fixed-rate deal could surpass the 6 percent mark in the coming days, for the first time since December.
Aaron Strutt, of Trinity Financial, said: ‘If lenders continue to raise their rates over the next few weeks, two-year deals are likely to top 6 per cent in the next week or two.
“But you can still get a two-year contract for a much cheaper price… so it’s worth shopping around.”
The average two-year fixed rate deal is 5.93 per cent, up from 5.76 per cent in January, according to the Moneyfactscompare website.
For someone with a £200,000 mortgage over 25 years, this would be the difference between paying £1,259 and £1,280 a month, which equates to an extra £252 a year.
Around 1.6 million borrowers with fixed rate deals will need to remortgage this year, according to UK Finance, the industry trade body.
Rachel Springall, finance expert at Moneyfactscompare, warned: “Borrowers exiting a fixed-rate mortgage and moving to their reverse rate this year could see their repayments soar, so it’s wise to secure a deal with a higher rate.” low”.
Building societies cut their mortgage rates in January in anticipation that the Bank of England would cut its base rate in the first half of this year.
But the cost for banks to borrow money to lend to homeowners, or the “swap rate,” has been rising amid signs that homebuyers and homeowners will have to wait much longer for a fall in rates. Interest rates.
Markets now predict the Bank will cut rates in August for the first time since it began raising rates in 2021.
