Credit, Collections & Insolvency News
The average rate on a two-year fixed-rate mortgage has now reached 6.07%, according to Moneyfacts, the first time the average rate has breached the 6% mark since November 2008.
The impact in the financial markets following the Government’s mini-Budget saw lenders withdraw a record number of deals, but some banks and building societies are now slowly returning products to market, albeit with prices that incorporate much higher interest rate forecasts.
Banks have also been increasing the interest rate “stress test” they apply to borrowers to see if they can afford mortgage repayments. Meanwhile, bosses from Barclays, NatWest and Lloyds Banking Group are expected to attend a meeting with Chancellor Kwasi Kwarteng during which mortgage lending will be discussed.
An average of at least 100,000 people a month are coming to the end of their current mortgage, and face a significant rise in their monthly repayments.
Rachel Springall from Moneyfacts said “Borrowers may well be concerned about the rise to fixed mortgage rates but it is essential they seek advice to assess the deals that are available to them right now.”
“Fixing for longer may seem more appealing, particularly as both the average two- and five-year fixed rates rise to levels not seen in over a decade. Consumers must carefully consider whether now is the right time to buy a home or to wait and see how things change in the coming weeks.”