The cost of fixed-rate mortgage rates continued to edge upwards this week, despite the Bank of England cutting interest rates at the start of this month.
Analysis of market movements this week by Moneyfacts shows two-year, three-year and five-year fixes all increased, across the vast majority of LTV bands, as swap rates remained volatile.
The biggest increases were in the five year market, where rates rose by 0.06% (averaged across all LTV bands). Meanwhile the the average two-year fix rose by 0.04%, while there was a more marginal increase in the average three-year fix, up by just 0.01%.
In the three-year fixed rate market, loans up to 95% LTV saw a slight fall in pricing this week, down 0.02%, the only band across these different categories to buck the prevailing upwards trend.
Moneyfacts spokesperson Caitlyn Eastell said that building societies had been most active when it came to rate changes this week, announcing both rate cuts and increases, as well as product withdrawals and launches.
However Eastell pointed out a handful of the UK’s largest mortgage lenders have also altered their product ranges. “The prominent brands to increase selected fixed rates this week included Virgin Money by up to 0.15%, Royal Bank of Scotland by up to 0.10%, and NatWest by up to 0.10%,” she said.
Moneyfacts said a whole host of building societies had repriced their fixed ranges. Some of the biggest increases were seen from Progressive Building Society (by up to 0.54%), Hinckley & Rugby Building Society (by up to 0.44%), Saffron Building Society (by up to 0.40%), Melton Building Society (by up to 0.39%), West Brom (by up to 0.20%), Suffolk Building Society (by up to 0.20%) and Skipton Building Society (by up to 0.14%).
Eastell adds: “With inflation ticking upwards again more than expected earlier this week this may also dampen hopes for potential interest rate cuts early next year, it remains uncertain when widespread cuts will make their return.”
However despite this more pessimistic outlook, Moneyfact pointed out that in these product refreshes some “eye-catching deals” surfaced this week. This includes a two-year fixed rate deal from TSB, priced at 4.59% and available at 80% loan-to-value for house purchase customers. Moneyfacst says the deal charges a reasonable £995 product fee which is offset by a free valuation incentive.
