We've been enjoying several months of record low mortgage rates, meaning borrowers have been able to benefit from the lowest repayments on record. But, it couldn't last forever, and research from Moneyfacts suggests that the end is nigh.
Our research shows that average mortgage rates, particularly those at lower LTVs, have already started to edge up over the last month, so it looks as though the run of record lows is coming to an end.
Rates at 60% LTV have been cut the most, with the average rate for a two-year 60% LTV deal rising from 1.81% at the start of July to 1.86% today. The five-year version has witnessed a similar increase, up from 2.54% to 2.59% over the same period. But why?
Well, much of it can be attributed to Mark Carney's speech on 14 July, where he indicated that base rate could rise around the turn of the year. Since then, SWAP rates (the rate affecting prices in wholesale markets) have edged up slightly and providers have increased selected rates across their range of mortgage products, almost as if they're "preparing for the inevitable rise to happen", said Charlotte Nelson, finance expert at Moneyfacts.
Ms Nelson pointed out that, of the number of mortgage changes recorded by Moneyfacts in July (125), 36 were for increases, more than double the 15 rate increases recorded during the previous month. It's particularly notable when looking over the last six months as it shows just how much things are already changing – in January, for example, just six rate increases were recorded, a stark difference to today.
"In the past few months borrowers have seen the lowest ever rates on the market, and at the moment some of these appear to remain unscathed, at least at higher LTVs," said Ms Nelson. "But, with signs of rates increasing already, these record lows will not last forever, and the number of changes signals that we've at least reached the point where rates have flatlined - and the only way for them to go is up."
So, don't hang around – if you spot a great mortgage deal, snap it up! There are still some truly great rates to be found (check out our best buys to get started), and if you're currently on your lender's standard variable rate or are coming to the end of a fixed rate deal, act fast – that way, you can secure lower monthly repayments for the future, before widespread rate rises come into effect.
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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