Prices rise   – Mortgage Strategy

Average fixes rose this week as lenders continue to adjust prices on the expectation that a Bank of England base rate cut will not come before the spring.  

The average rate for a two-year fix edged up 2 basis points to 5.76%, while the average three-year fix was 5 basis points higher at 5.48%.   

The average five-year fix was up 3 basis points to 5.34%, while the average 10-year fix climbed 4 basis points to 5.98%.  

Two-year fixes    

The largest rises in this term came at the 50% LTV average rate, which jumped 21 basis points to 5.59%, followed by the 65% LTV average rate, up 8 basis points to 5.80%.      

The 95% LTV average rate was 2 basis points higher at 5.99%, while the 85% LTV average rate rose by a single basis point to 5.90%.     

Three-year fixes    

The biggest uplift at this level saw the 65% LTV average rate climb 12 basis points to 5.60%, followed by the 85% LTV average rate, up 9 basis points to 5.68%.  

The 95% LTV average rate was 5 basis points higher at 5.86% while the 90% LTV average rate rose by 4 basis points to 5.52%.  

Five-year fixes  

The largest rises in this term came at the 50% LTV average rate, which leapt 14 basis points to 5.60%, followed by the 65% LTV average rate, up 6 basis points to 5.56%.  

The 95% LTV and the 85% LTV average rates were both 2 basis points higher at 5.46% and 5.42%, respectively.  

10-year fixes  

The biggest rises in this level came at the 85% LTV average rate, which jumped 24 basis points to 6.04%, followed by the 50% LTV average rate, up 15 basis points to 5.04%.  

The 95% LTV and the 90% LTV average rates were both unchanged at 5.75% and 5.32%, respectively.  

Moneyfacts finance expert Rachel Springall says: “This week the mortgage market experienced a mix of fixed rate rises, with several mutuals moving to adjust their pricing.   

“These movements echo the sentiment from last week and as a result, both the average two- and five-year fixed rates rose week-on-week.  

“The Co-operative Bank re-launched some fixed rates, both through its direct and intermediary business arm, and there was a mix of brand-new deals as well as product withdrawals from other lenders.  

“The prominent brands to increase fixed rates this week were TSB by up to 15 basis points, Virgin Money by up to 10 basis points, first direct by up to 25 basis points and Halifax by up to 29 basis points as well as making cuts of up to 20 basis points.   

“Building societies were active again this week, making several fixed rate increases. Those lenders to make increases to selected fixed rates included West Brom Building Society by up to 31 basis points, Coventry Building Society by up to 30 basis points, Skipton Building Society by up to 22 basis points, Cumberland Building Society by up to 15 basis points, Nationwide Building Society by up to 15 basis points and Newcastle Building Society by up to 14 basis points.  

“More lenders to cut fixed rates this week included Gen H by up to 21 basis points and Aldermore by up to 20% basis points.  

“The lenders to reduce rates this week included Santander by up to 8 basis points as well as launching a few new build deals and Newbury Building Society cutting by up to 30 basis points. Elsewhere, MPowered Mortgages withdrew and replaced its fixed range, with its five-year fixed deals starting from 4.48%.  

Springall adds: “Some eye-catching deals also surfaced this week, including a two-year fixed deal from The Co-operative Bank, priced at 4.74% and available at 75% loan-to-value for all borrower types. It includes a free valuation and £250 cashback for all and, for remortgage borrowers, free legal fees and charges a £999 product fee, which can be added to the mortgage advance, so a great choice for borrowers looking to save on the upfront cost of their deal.  

“Lenders continued to react to the volatile swap rate market by increasing rates in their range this week, and swaps remain higher than they were a month ago.   

“Borrowers must not let the volatile markets deter them from comparing deals, as there are some great cost-saving packages out there.   

“As we have seen this week, some deals can be withdrawn and replaced entirely, so seeking advice is wise to keep on top of the changing market.”