Fixed-rate mortgages hit six-month high

With speculation mounting that an interest rate hike is imminent, the cost of fixed-rate mortgages continues to rise. Research from website Moneyfacts reveals that fixed rates have hit a six-month high as the cost of funding increases and lenders pass this onto borrowers.

Many lenders have raised fixed rates since the start of the year, with some increasing their pricing more than once. Those lenders who have not raised rates are expected to do so shortly, as the price of Swap rates – the rate lenders pay to borrow from each other – continues to soar.

Borrowers who want a fixed rate but haven’t got round to securing one may be worried that they are too late. Yet there are still some competitive deals available, particularly for those with sizeable deposits. Five-year fixes start from less than 5 per cent, while those who don’t need that certainty could opt for a two-year tracker from just over 2 per cent.

Melanie Bien, director of Private Finance, says: ‘There is no need to panic. If you are purchasing a property or remortgaging, there are still plenty of well-priced deals, particularly for those with a large deposit to put down or significant equity in their homes.

‘The high street banks may not provide the answer; the private banks are often the most competitive solution for the right sort of client. It is worth finding out whether you meet their criteria so you should seek advice from an independent mortgage broker.’

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