According to the latest interest rate monitor from Moneyfacts, the price of average fixed-rate mortgages rose this week due to renewed unrest in the Middle East.
The average two-year rate rose from 5.46% last week to 5.5% on July 17, while the typical average five-year rate rose from 5.48% to 5.52%.
Long-term fixed rates saw the largest average increase this week, with 10-year rates up to a 50% LTV rising a typical increase of 35 basis points to 5.48%.
Meanwhile, ten-year fixes up to 100% LTV rose 25 basis points to 6.7%2, and five-year fixes up to 50% LTV rose 17 basis points to an average of 5.28%.
Moneyfacts personal finance analyst Caitlyn Eastell said: “Average mortgage rates have risen week-on-week for the first time since Easter. While a 4 basis point increase may seem ‘small’, it is a reminder of how quickly markets can change. In just a week, an average borrower with a £250,000 loan over 25 years could add around £70 extra per year to their monthly repayments.
“The latest disruption in the Middle East has increased expectations that inflation and interest rates will remain higher for longer, leaving lenders with no choice but to reprice products. Just at the start of the month, mortgage rates fell at the fastest pace in almost two years, so the sudden switch could be incredibly frustrating for borrowers.”
The increase was caused by 15 lenders raising interest rates. This included NatWest, which increased its fixed rates by as much as 27 basis points, while Barclays rose by 7 basis points.
Rises of up to 35 basis points came from lenders such as Furness Building Society, Leek Building Society and Nationwide Building Society.
Fixed interest rate increases (bps)
- April Mortgages – Fixed interest rate increased by 25bps.
- Bank of Ireland Intermediaries – Fixed interest rate increased by up to 33bps.
- Bank of Ireland UK – Fixed interest rate increased by up to 33bps.
- Barclays – Fixed interest rate increased by up to 7bps.
- Coventry Building Society – Fixed rates increased by 20bps.
- Furness Building Society – Fixed rates increased by up to 35bps.
- Gen H – Fixed rates increased by up to 25bps and later on up to 19bps.
- Leek Building Society – Fixed rates increased by up to 35bps.
- Melton Building Society – Fixed rates increased by up to 20bps.
- National Construction Association – Fixed rates increased by up to 35bps.
- NatWest – Fixed rates increased by up to 27bps.
- NatWest Intermediary Solutions – Fixed rates increased by up to 27bps.
- Royal Bank of Scotland – Fixed interest rate increased by up to 27bps.
- Vernon Building Society – Fixed rates increased by up to 30bps.
- Virgin Money – Fixed interest rate increased by up to 35bps.
Discounts on fixed rates
- Nottingham Building Society – Fixed rates reduced by up to 14bps.
- Progressive Building Society – Fixed rates reduced by up to 40bps.
- The Cooperative Bank for Intermediaries – Fixed rates reduced by up to 25bps.