Could rising swaps put an end to falling mortgage rates?

Mortgage rates have been falling for the past year, which has made mortgages more affordable and home-ownership cheaper.

Fixed mortgage rates have become particularly competitive, however falling rates may not continue for much longer due to an increase in swap rates.

Swap rates are used by lenders to set fixed mortgage rates, and since May swaps have risen. Between 3 May and 25 June 5 year swap rates increased from 0.94% to 1.85%, and 2 year swap rates increased from 0.61% to 1.01%.

This sharp increase is anticipated to start to affect lenders fixed mortgage rates, 5 year fixed are being predicted to be hit the most.

As there is now increased likelihood rates will climb home-owners looking to remortgage, would-be buyers looking to purchase and investors looking for a buy to let deal are advised to act to secure a low rate offer.

Some lenders have already started to push rates up such as the Newcastle BS which has increased its 5 year fixed rate mortgage for 80% LTV from 3.59% to 3.99%.

Some analysts are predicting this could be the beginning of a new trend for rising rates, as where one lender leads others quickly follow. Soon all mortgage lenders market-wide could follow suit, which means we could see rates once again climb to less affordable levels.

While rates remain historically low it makes sense to look yourself into a cheap deal.

Making a review the entire mortgage market to find a competitive offer is vital, however it is time consuming. Working through all lenders products at varying rate and fee levels is a complex business and best done with help.

To find yourself a low rate mortgage before rates rise contact Deal Direct on 0800 048 8828.

Call an adviser today to find you a great mortgage offer.