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  • Writer's pictureMatthew Pigrome

📢 Important News from Matthew Pigrome of Mortgage321!

The latest update on the mortgage market reveals that mainstream lenders are no longer offering two-year fixed mortgages with interest rates below 5%. With rates on home loans continuing to rise, all major lenders have increased their rates, leaving only Hanley Economic Building Society offering a two-year rate under 5%. This shift comes ahead of a significant week for mortgages, as the latest inflation rate and a potential change to the Bank of England base rate loom.

The fluctuations in swap rates, which banks use to predict future interest rates and set mortgage rates, are behind the rate increases. Market expectations of a base rate exceeding 5% soon have prompted lenders to price most two-year mortgages over 5%. However, there is some relief for borrowers in the form of more five-year deals below 5% as rates are anticipated to be cheaper in the future.


In line with this market trend, NatWest has aligned its rates on two-year and five-year mortgages for first-time buyers, purchase deals, and remortgages with deposits of 10% or more. This move places the decision-making responsibility on homeowners and their appetite for risk.


As the Bank of England is widely expected to raise the base rate, mortgage rates have risen rapidly over the past two weeks. The average two-year fixed rate mortgage deal currently stands at 5.92%, while the average five-year rate has reached 5.56%. Homeowners with a £300,000 mortgage may witness their annual payments rise by £13,200 compared to 18 months ago.


If you're in need of a mortgage or looking to remortgage, it's crucial to explore your options promptly. Use our best buy tables powered by Mortgage321 to find deals matching your needs. Act swiftly to secure a favourable rate and consider locking into a new deal if your fixed rate is ending within the next six to nine months. Remember, fees can be added to the loan, allowing you to secure a rate without incurring expensive arrangement fees.


For home buyers, securing rates early will provide clarity on monthly payments. However, be cautious not to overstretch yourself, as higher mortgage rates may limit borrowing ability and potentially impact house prices. To compare mortgage costs effectively and find the right deal, it's recommended to consult with a reputable broker, such as Mortgage321, who can guide you through the process.


Stay informed, act decisively, and navigate the evolving mortgage market with Mortgage321. We're here to assist you in finding the best mortgage solution tailored to your needs.


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