Unsurprisingly following last week's much-anticipated decision by the Bank of England to raise the base rate, mortgage rates have seen quite a rise this month. Indeed, the average two-year fixed mortgage rate has risen by a whopping 0.12%, marking the highest monthly rise recorded since August 2009, according to the latest Moneyfacts UK Mortgage Trends Treasury Report.
The increase to the two-year fixed mortgage rate this month means that the last six months of rate cuts have now been fully reversed, and more. While the average rate in May stood at 2.30%, November's average surpasses this at 2.33%, marking quite the recent turnaround, as can be seen in the table below.
Source: Moneyfacts Treasury Report
Now you may be thinking that mortgage providers have been a bit quick to react, what with the Bank of England only officially increasing the base rate last Thursday. However, as we've reported previously, SWAP rates were on the rise before the announcement was made, as speculation caused them to increase significantly. Providers had little choice but to follow suit, with these inter-bank interest rate increases causing their costs to go up.
And it's not just the two-year mortgage rate that has suffered, as Charlotte Nelson, finance expert at Moneyfacts, explains: "Following the two and five-year SWAP rates going up by similar amounts, the average five-year fixed mortgage rate has increased in the same dramatic fashion, having risen by 0.12% from 2.76% in October to stand at 2.88% today."
There's no indication that these rate increases will stop any time soon, or even slow down, with Charlotte explaining that "since the start of October, 49% of lenders have increased their rates in some shape or form. The recent base rate rise is likely to only add fuel to the fire and cause rates to rise particularly in the variable rate market."
As a result, better late than never might be a good motto - those who have yet to remortgage may not be able to get the lowest rates anymore, but they are still likely to be able to get a better rate now than if they wait for the effects of the base rate rise to really hit home.
"[Especially] any borrower sitting on their SVR or coming to the end of a deal should remortgage as soon as possible to avoid disappointment in a market where rates are rising," says Charlotte. So, you may want to head over to our mortgage charts now, to see if you can lower your repayments before rates rise even more.
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.