A category of mortgage has seen the biggest monthly rise in rates since August last year.
Independent mortgage market monitor Moneyfacts says the average mortgage rates on the overall two- and five-year fixed rates rose by 0.13% and 0.19% to 5.52% and 5.28% respectively. It was the biggest monthly rise to the five-year fixed average rate since August 2023.
At the start of January 2024, the average five-year fixed rate was 5.55%; compared to the start of this month, the rate is now 0.27% lower at 5.28%. However, the average two-year fixed rate has dropped by 0.41% over the same period, down from 5.93% to 5.52%.
The average two-year fixed rate is 0.24% higher than the five-year equivalent, compared to 0.30% a month prior. The two-year fixed rate has now been higher than the five-year equivalent since October 2022.
The average two-year tracker variable mortgage rate fell to 5.46%.
The average ‘revert to’ rate or Standard Variable Rate (SVR) fell to 7.85%. In comparison, the highest recorded was 8.19% during November and December 2023.
Product choice overall rose month-on-month, to 6,486 options, the biggest month-on-month increase since June this year, with product numbers substantially higher than a year ago.
The availability of deals at the 95% loan-to-value tier rose to 365 now at its highest point in over two years (369 – May 2022).
And the average shelf-life of a mortgage product rose to 21 days, up from 17 days a month ago.
Moneyfacts mortgage expert Rachel Springall says: “In a somewhat inevitable turn of events, fixed mortgage rates rose month-on-month as lenders rushed to re-price products due to volatile swap rates. This month the average five-year fixed rate felt a notable monthly rise, and during 2024 the rate has not fallen as much as its two-year counterpart. This will come as disappointing news to those borrowers who prefer to lock into a deal for the longer-term.
“One positive outcome of November was a slight uptick in product availability, and a calming in the average shelf-life of a mortgage, which rose from 17 days to 21 days. This indicates that lenders are not re-pricing or pulling deals as aggressively as they were during October.
“However, lenders will now need to grapple with any future uncertainty surrounding interest rate pricing while aiming to hit any year-end targets. Borrowers will hope that mortgage rates will drop next year, and while there is speculation over multiple cuts to the Bank of England base rate, stubborn inflation can delay such decisions. In addition, the present market proves that a base rate cut does not always mean fixed mortgage rates will immediately fall if there are other economic challenges in play for lenders to consider.”
This article is taken from Estate Agent Today