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With the Bank of England base rate – and consequently most mortgage rates – due to rise next month, it seems that providers are already starting to prepare. As a result, the forthcoming Moneyfacts UK Mortgage Trends Treasury Report shows that the average two-year fixed mortgage rate has risen for the second month in a row to reach its highest point since September 2016.
Specifically, Charlotte Nelson, finance expert at Moneyfacts, reports that the average has increased by 0.04% compared to last month, now sitting at 2.43%. She states: "After months of stagnation, March and April's increases in the average two-year fixed rate have now effectively cancelled out any rate reductions that may have occurred in the last 19 months."
|Average Rates||Sep 16||Apr 17||Apr 18|
Source: Moneyfacts Treasury Reports
At the same time, base rate speculation is also spiking, as "The two-year SWAP rate has risen to its highest value since August 2015, rising by 0.08% to stand at 1.11% today," Charlotte says. Not only is this a base rate indicator, but it also means that it's getting more expensive for providers to operate their businesses, which sees many forced to increase mortgage rates.
Charlotte further speculates that the withdrawal of products from the 60% loan-to-value (LTV) sector has also affected two-year fixed rate deals, as "the total number of 60% LTV products has fallen below 500 for the first time since September 2016, reaching 495 today." This is certainly disappointing news after the recent boom seen in this market.
It could very well be that providers are withdrawing their riskiest or most popular products just to be on the safe side. Alternatively, these products could just be getting oversubscribed as people take advantage of low rates while they can. Either way, those who are looking to remortgage or move house may not have long to decide before the most competitive deals are withdrawn or repriced.
"With rates on the rise before the Bank of England has even decided on whether or not to increase interest rates, borrowers who are coming to the end of a deal or sitting on their SVR should consider remortgaging as soon as possible," Charlotte warns.
Have a look at our mortgage charts to see if there's still a deal worth your time
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