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Mortgage rates hit six-month high

Average mortgage rates today stand at their highest level in six months, according to Moneyfacts.co.uk.

Moneyfacts.co.uk says this is because lenders are passing rising funding costs on to borrowers.

Swap rates – which are the borrowing rates between lenders – have increased dramatically in recent months. At the end of November, the two-year swap rate stood at 1.35 per cent, whereas today it stands at 1.98 per cent.

The average two-year fixed rate is priced at 4.49 per cent, the highest level since August 2010. Three-year fixed rates are, on average, 5.05 per cent, the highest level since September. And five-year fixed rates are today 5.45 per cent, the highest level since August.

Moneyfacts.co.uk spokeswoman Michelle Slade says: “Fixed mortgage rates continue to rise as lenders pass on the higher cost of funding to borrowers.

“The majority of lenders have increased rates since the start of the year, with some mortgage deals seeing rate rises of more than 0.50 per cent.

“Borrowers who have delayed the decision to commit to a new deal will now find themselves having to pay higher monthly payments.”

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