Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Strategy. Read the original article for full details.
Average Fixed Mortgage Rates Increase Following Middle East Turmoil
Average fixed-rate mortgages in the UK rose this week, according to the latest Moneyfacts rate watch. The increases follow renewed turmoil in the Middle East, which has impacted market expectations for inflation and interest rates.
The average two-year fixed rate increased from 5.46% last week to 5.5% on 17 July. The typical average five-year fixed rate also rose, moving from 5.48% to 5.52%. Long-term fixed rates saw the largest average increases, with 10-year fixes at 50% loan-to-value (LTV) rising by 35 basis points to 5.48%. Ten-year fixes at 100% LTV rose by 25 basis points to 6.7%, and five-year fixes at 50% LTV increased by 17 basis points to an average of 5.28%.
Moneyfacts reported that average mortgage rates have climbed week-on-week for the first time since Easter. The rise was driven by 15 lenders increasing their rates. Notable changes include NatWest increasing its fixed rates by up to 27 basis points, Barclays by up to 7 basis points, and lenders such as Furness Building Society, Leek Building Society, and Nationwide Building Society raising rates by as much as 35 basis points.
Other lenders making increases include April Mortgages (up to 25bps), Bank of Ireland Intermediaries and Bank of Ireland UK (up to 33bps), Coventry Building Society (20bps), Gen H (up to 25bps and later by up to 19bps), Melton Building Society (20bps), NatWest Intermediary Solutions (27bps), Royal Bank of Scotland (27bps), Vernon Building Society (30bps), and Virgin Money (35bps).
Some lenders did reduce fixed rates, including Nottingham Building Society (down by up to 14bps), Progressive Building Society (down by up to 40bps), and The Co-operative Bank for Intermediaries (down by up to 25bps).
These changes may affect letting agents and inventory clerks by influencing landlord and tenant decisions regarding new tenancies and mortgage products.
Source: Mortgage Strategy