No Respite For Borrowers
As Nationwide and Woolwich put up their two-year fixed mortgage rates, the average two-year fixed rate is now at a ten-year high of 6.75%. Recent swap rate rises and competitor activity are blamed. Further rises are expected.
It’s not getting any easier for mortgage borrowers. On Monday both Nationwide and Woolwich put their mortgage rates up, and the cost of a two-year fixed mortgage has reached its highest point for ten years.
The most popular mortgage product – the two-year fixed rate – has hit 6.75%.
Nationwide has increased its mortgage rates for the second time in as many weeks, pushing its two-year fixed rate up by 0.5%.
Woolwich – now owned by Barclays – also announced a rate rise, and all two-year fixed rates will be higher as previous funds have been exhausted.
The recent increases in swap rates – which banks use to borrow money on the money markets – mean that lenders say they have little choice but to increase their rates. Five year fixed rates have also gone up to an average of 6.72%. There seems to be little escape for beleaguered homeowners.
At Nationwide the two-year fixed rate for a buyer with a 10% deposit went up from 6.45% to 6.95%, with a £599 fee. Without a fee the rate went up from 6.85% to 7.35%. The biggest building society in Britain blamed the swap rate rises, and rate increases by its competitors. Remortgage rates at Nationwide are even worse. A 10% deposit two-year fixed-rate with a £599 fee has gone up from 6.65% top 7.15%, and without a fee it’s up to 7.55%. It is interesting to note that these rates are all higher than Nationwide’s standard variable rate which stands at 6.49%. This is highly unusual.
Divisional director for mortgages at Nationwide, Matthew Carter, said that market volatility would mean further changes in mortgage rates across the industry.
Abbey, Halifax and Bradford & Bingley have all raised mortgage rates recently. The best tracker deal from Britain’s biggest mortgage lender, Halifax, is now only offered to those with a 40% deposit.
