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TODAY'S OTHER NEWS

Mortgage rates creep up ahead of key BoE meeting

Lenders have started to push up the cost of their mortgage deals as the Bank of England moves a step closer to the first base rate hike.

The Bank's monetary policy committee meets tomorrow and two of its nine members are expected to vote to hike rates immediately to 0.75%.

Although that would mean rates hold steady at 0.5%, more lenders are likely to see that as a cue to start increasing the price of their own deals.

Some reports suggest that the first base rate hike could come as early as November.

Mortgage rates are already starting to edge up on base rate rise speculation, according to new research from MoneyFacts.

The average two-year fixed rate to 60% LTV rose from 1.81% in June to 1.86% in July, the first hike in 12 months.

And the average five-year fix increased from 2.54% to 2.59%, also the first hike in the year.

Separate research from MoneySuperMarket noted that First Direct charged 1.49% on its best price two-year fixed rate at the start of July, but this has now climbed to 1.69%.

Rates at 60% LTV have increased sharply, with the average deal costing 2.23%, more expensive than the average 65% LTV about 2.09%.

Dan Plant at MoneySuperMarket said there are still some great deals out there and borrowers should lock in before it's too late.

“It’s prime time for those looking for a mortgage as there are still some great deals on the market – even if it’s a bit bizarre that you can currently get a cheaper deal with a smaller deposit.

“However, the recent rate rise speculation is starting to make providers cautious, and this is being reflected in their offers. 

“Many lenders allow mortgage holders to reserve rates available now for up to six months for a small fee, so even those who still have some time left on their current deal can benefit."

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