Mortgage rates are rising but close to their peak
Mortgage rates have continued to increase this week but there are signs that this could be the peak, according to data from an online property portal
According to the latest figures from Rightmove, mortgage rates continue to rise, with some just below the 7% mark. The largest rate increase this week was at the 90% loan to value (LTV) tier with the average two-year fixed rate increasing by 0.32% to 6.79% and the five-year fixed rate up by 0.29% to 6.24%.
The average two-year fixed rate at 95% loan to value (LTV) rose by around 0.07% over the past week to 6.98%, and its five-year fixed rate at the same LTV tier ticked up by 0.11% to 6.34%. At 75% LTV, two-year fixed rates have risen by 0.17% to 6.46% and its five-year fixed rate has risen by 0.21 per cent to six per cent.
Within the 60 per cent LTV tier, the average two-year fixed rate increased by 0.12% to 6.38%, with the five-year fixed rate up by 0.11% to 5.9%.
The figures also showed that the average monthly mortgage payment on a first-time buyer type property for someone taking out a five-year fix at 85% LTV mortgage is £1,256, up by £32 per month compared to last week.
The average monthly mortgage payment on a first-time buyer type property for someone taking out a five-year fixed, 60% LTV mortgage is £864, an increase of £9 per month compared to last week.
Mortgage rates could fall in the ‘coming days’
Rightmove’s mortgage expert Matt Smith said: “After the market turbulence over the last two months, the signs are there that mortgage rates are reaching a peak. There’s been an increase in average rates compared with last week, but we may now see some lenders begin to cut rates in the coming days.
“However, any cuts to rates are likely to be small, at least to begin with, as lenders will be looking to balance their desire to reduce rates with the need to account for any further market surprises as the economy looks to get onto a more stable footing for the long term.”
He added: “It takes some time for lenders to respond to market conditions and feed these through to mortgage rates offered to borrowers. Today’s numbers confirm that some of the reports of immediate mortgage rate falls at the tail end of last week may have been slightly premature.”