The average two-year fixed residential mortgage rate has risen by two basis points to 6.23%, according to Moneyfacts.
Last week, The Monetary Policy Committee of the Bank of England voted 7-2 to raise interest rates by a further 0.5 percentage points from 4.5% to 5% in an effort to combat ongoing inflation, which stands at 8.7% according to the ONS. This is the 13th successive increase in the base rate.
The average five-year fixed residential mortgage rate subsequently rose by 3bps to 5.86% since the end of last week.
The average two-year buy-to-let loan rate has remained unchanged over the same period at 6.49%. The average five-year BTL mortgage rate came down by a single basis point to 6.39%.
New research from the Liberal Democrats suggests that mortgage rates will be equivalent to a 2p income tax hike – showing annual mortgage repayments expected to be around £15 billion higher in December 2024.
Simon Webb, managing director of capital markets and finance at LiveMore said
“Government intervention in the mortgage market is inappropriate and likely to have unforeseen consequences. If the government did set up a mortgage protection fund, homeowners would still have to repay the money back at a later date. Lenders already have forbearance options so if borrowers are struggling with higher mortgage rates they should speak to their lender about what solutions may be available”.
Many lenders offer a payment holiday for up to six months or they could stretch the term to bring down monthly repayments. For those on capital and repayment mortgages, they may be able to switch temporarily to interest-only or part and part.”
SPF Private Clients chief executive Mark Harris questioned the support offered for first-time buyers:
“Would wannabe first-time buyers think it fair that taxpayer money goes towards supporting those already on the housing ladder when they are struggling to get there?”
