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Mortgage Rate Rises Continue

01.03.22

Welcome to another week and it is hard to believe it is March already!

Like last week, this week is all about the continued rate rises that we are seeing across the board. Remember it was not long ago that we were talking about the best 5-year fixes being below 1% and now we are seeing the best 5-year fixes at 1.79% – which shows how far and how quickly things have changed in the market.

In the last week, according to Money Facts, the average price of all fixed-rate mortgages rose, powered by major hikes at almost every LTV category.

For a two-year fix, the average rate jumped 9 basis points, and for a three-year fix, the average rate climbed 10 basis points.

The average rate for a five-year fix increased by 6 basis points, whilst the average rate for a 10-year fix went up by 8 basis points.

However, for most buyers, this is still very affordable in terms of monthly payments, but borrowers do need to get over the psychological barrier that these rates are now “expensive”. They are not, but they certainly feel that way after the low rates of the past few months.

The message to borrowers and prospective buyers however is very much, the earlier you sort your mortgage out the better the rate will be as we expect further increases over the coming weeks.

What was also interesting was a report from The Mortgage Lender (I know, subtle name huh?), that suggested around 14% of all UK adults plan to buy a home this year, but 34% could see mortgage application issues from poor credit histories, or issues brought about by the last couple of years.

It is stats like these that show that it is vital that prospective borrowers get professional advice before they go out shopping for a home to avoid disappointment. The good news is that a decent broker, (hello!), will have access to all the specialist lenders in the market who may well be able to assist where the high street won’t.

This reduces stress levels and avoids aborted transactions for buyers and sellers alike. We are here to help.

Have a great week.

Best Mortgage Rates

In terms of mortgage rates, for standard residential mortgages, borrowers can obtain 2-year fixes at 1.49% (3.40% APRC) and 5-year fixes from 1.79%, (2.80% APRC) whilst variable tracker rates are around from 1.25%, (3.30% APRC).

Those looking at Buy-To-Let can now obtain products from 1.09%, (4.40% APRC) for 2-year fixed or 5-year fixes are available from 1.74% (3.80% APRC).

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Andrew Montlake

Written by Andrew Montlake

Andrew Montlake, better known as Monty, began his journey with an Hons degree in Economics & Politics before starting in the mortgage industry in February 1994. As a main founder of Coreco in 2009, he successfully grew the brand, marketing, and communications, and was made MD in 2019 focussing on the overall vision, strategy, and culture of the company. As Coreco’s media spokesperson, Andrew can often be seen or heard on TV and radio as well as regularly commenting in the national, local, and trade press. He is the author of this acclaimed Mortgage Blog and is well-known for his social media, podcasts, and public speaking. Andrew is now proud to serve as Chairman of the Association of Mortgage Intermediaries, (AMI) as a cheerleader for the Mortgage Industry as a whole and continues to work at the coal face, writing mortgage business and advising clients.

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