Average fixed mortgage rates continued to rise this week as the BoE raised interest rates to 5%.
Moneyfacts reveals that tor a two-year fixed with all LTVs, the average rate rose from 5.98% on 16 June to 6.19% today (23 June).
For a 90% LTV two-year fix the average rate rose from 6.11% to 6.22% and for a max 80% LTV for the same period the rate rose from 6% to 6.26%. For a two year fixed 65% LTV the average rate jumped from 5.94% to 6.24%.
For a five-year fixed max 85% mortgage the average rate increased from 5.68% to 5.91% and for 75% LTV products, the average rate increased from 5.61% to 5.84%.
Those lenders notifying brokers of rises included Yorkshire BS which increased its rate on variable tracker mortgages by 0.5% in line with the BoE rate rise. Virgin Money followed suit and both lenders confirmed the changes would come into effect on June 23.
The Mortgage Lender also increased the rates on its fixed rate mortgage range by 0.75% – also with effect from June 23.
Moneyfacts financial expert Rachel Springall comments: “This week saw multiple changes from lenders, including some notable rate hikes to fixed rate deals by well-known brands. The rate movements have resulted in the average two year fixed mortgage rate breaching 6% this week, whereas the average five year rate rests below”.
“There were a variety of lenders who decided to increase selected fixed rates, some by up to 0.80% this week, and the number of lenders increasing rates outpaced those reducing them. Now that we have seen the Bank of England increase base rate by 0.50%, we have inevitably seen a few lenders increasing their tracker mortgages in line. Some lenders have also decided to pass this onto their standard variable rates”.
She adds: “The average two-year fixed rate has seen several notable daily uplifts in June, compared to the rest of 2023, so it is possible there may be a bit more stability surrounding price hikes moving forward over the next few days. However, swap rates remain volatile, and it can take a few weeks for lenders to take this into account.”
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