New Moneyfacts data has revealed that the average two-year fixed mortgage rate has risen from its historic low in October with a 0.12% increase, the highest monthly rise since August 2009.
This rise has effectively wiped out any rate cuts that have occurred in the last six months, seeing the average rate surpass May 2017 figures to reach 2.33% this week. The average five-year fixed mortgage rate has also risen by 0.12% from 2.76% in October to stand at 2.88% today.
Charlotte Nelson, Finance Expert at Moneyfacts, said: “Last month the Mortgage Treasury Report suggested that the speculation surrounding the possibility of a base rate rise would cause mortgage rates to rise in response. Now, November’s figures show that, not only has the average two-year fixed rate risen, but the monthly increase is the largest that has been recorded since August 2009.
The speculation surrounding the announcement on 2 November saw interest SWAP rates rise significantly, with providers having little choice but to factor this into their pricing. Since the start of October, 49% of lenders have increased their rates in some shape or form, with providers preparing for a base rate rise that was seen as a sure thing. The recent base rate rise is likely to only add fuel to the fire and cause rates to rise particularly in the variable rate market.
With rates on the rise even before base rate rose, borrowers should use this as a catalyst to sort out their mortgage. Any borrower sitting on their SVR or coming to the end of a deal should remortgage as soon as possible to avoid disappointment in a market where rates are rising.”