Average mortgage rates continued to rise this week, with both two- and five-year fixes up 0.5%, though price cuts were also made.
According to Moneyfacts’ latest Mortgage Rate Watch, the average two-year fix now stands at 5.52%, with the average five-year fix at 5.30%.
On three-year fixes, rates have risen an average of 0.04% to 5.34%, while the average 10-year fix rose by 0.01% to 5.64%.
Moneyfacts notes the prominent brands that increased rates this week included Virgin Money, up 0.20%, also withdrawing certain intermediary exclusive deals, and Santander with rate rises of up to 0.34%, who also reduced rates on specific products and withdrew some two year fixes.
HSBC reduced its five year fixed premier mortgages by up to 0.07% and then made increases on selected fixed deals by up to 0.24%.
Other lenders moved to increase rates such as LendInvest Mortgages by up to 0.20%, Foundation Home Loans by up to 0.45%, April Mortgages by up to 0.25% and Vida Homeloans by up to 0.35%. Aldermore reduced rates by up to 0.20% but also made increases of up to 0.20% and The Co-operative Bank withdrew and replaced its range of deals, including new ‘green’ and ‘professional’ options.
Leeds Building Society increased rates by up to 0.40% but also launched some new two-year fixed deals, while Coventry Building Society increased selected rates on higher loan-to-value deals by up to 0.40% but also moved to withdraw and replace its offset fixed rates.
In contrast, there were a couple of lenders making notable rate cuts, such as Principality Building Society by up to 0.37%, Progressive Building Society by up to 0.30%, Monmouthshire Building Society by up to 0.20% and Leek Building Society by up to 0.13%.
Yorkshire Building Society reduced rates by up to 0.30% but also made increases of up to 0.26%. New deals also entered the arena, Vernon Building Society launched new fixed deals including those at higher loan-to-values and Scottish Building Society launched new RIO deals.
Moneyfacts finance expert Rachel Springall says: “It was another week of uncertainty surrounding the future of interest rate pricing, but many lenders appeared to act with caution.
“There were indeed some lenders increasing fixed rate deals, but there were also a mix of lenders reducing rates, withdrawing deals, and launching new ones. Borrowers will no doubt be anxious on whether rates will come down in the months to come, particularly if they are one of the many looking to remortgage.
“As it stands, many of the biggest lenders in the country have their lowest rates set just over 4%, so there are some decent deals out there. However, the lowest rate deals are not always the best choice, and those with limited disposable income would be wise to consider a deal based on its overall package. Incentives and low product fees can help borrowers save money on the upfront cost of any deal, and using a broker is a good idea to assess all many options out there on a true cost basis.”