Mortgage rates rise is biggest increase for 3 years.
Despite the BoE remaining static, home-owners have been hit with the biggest mortgage rates rise since 2009.
Last month saw average mortgage rates for a 2 year fixed rate deal, which to date has been one of the most popular mortgage products on the market, rise from 3.44 per cent in March to 3.65 per cent a month later in April.
This recent rate increase is the largest monthly rise recorded since June 2009 and is the seventh consecutive increase.
Back in September last year an average 2 year fixed rate mortgage cost just 2.92 per cent. According to the financial research company Defaqto, lenders 2 year fixed rate mortgage products now make up around a third of all current mortgage offers compared to a fifth back in 2007.
Annual gross mortgage lending is presently around £150 billion which means that rising mortgage costs could be affecting around £30 billion worth of UK lending.
Bank of England data also reveals that the average cost of 3 and 5 year fixed rates have increased. Last month saw rates rise by 0.14 per cent to 4.04 per cent for a 3 year deal and by 0.08 per cent to 4.28 per cent for a 5 year fixed deal. Average rate increases are being blamed on rising funding costs.
According to the FSA 50 per cent of all new mortgage lending at the end of 2012 was for fixed rate products, with rising SVRs and fears of more rate announcements that figure could start to increase.
If you are looking for competitive fixed mortgage rates contact Deal Direct.
