The average cost of fixed rate mortgages continued to trend upwards over the past week, as the number of lenders increasing rates outnumbered those imposing rate cuts.
Data from Moneyfacts shows that over the last seven days the cost of an average two-year fix rose by 0.02%, the average three-year fix by 0.04%, and the average five-year fix by 0.01%. These figures refer to pricing across all LTV bands.
Moneyfacts said that this increase was due to underlying swap rates, with volatility in pricing suggesting rates may continue to edge upwards in coming weeks.
However, Moneyfacts finance expert Rachel Springall pointed out that not all lenders had increased pricing over the past week. “There has been a mix of fixed rate increases, reductions and launches this week, but also a few deals withdrawn from the market entirely,” she says.
Among the high street lenders, Barclays increased rates on its products by up 20bps and Halifax by up to 5bps. TSB increased rates by up to 15bps but also withdrew its three-year fixed rate range.
There was also rate movement in the building society sector, with Leeds Building Society increasing fixed rates by up to 60bps, West Brom BS by up to 14bps, Suffolk BS by up to 25bps and Buckinghamshire BS by up to 20bps.
Meanwhile, Principality BS increased rates on its FTB two-year fixes by up to 10bps, but reduced selected fixed rates elsewhere by the same margin. Coventry BS also took this twin-track approach, with some deals up 15bps and others reduced by 30bps.
Moneyfacts said that Precise implemented some of the biggest increases, with fixed-rate deals increased by up to 70bps.
Springall says that there were also some “eye-catching deals” surfacing this week. This included a five-year fixed rate deal from Santander, priced at 4.28% available at 60% LTV for purchasers.
While here have been some mortgage cuts Springall says these have not been enough to halt the increase in average costs. She adds: “Due to volatile swap rates, there are expectations that fixed mortgage rates will rise over the next couple of weeks. The deals that have disappeared this week may well resurface, but this does signal a message to that deals are not guaranteed to stay on the shelf for long.”
