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TODAY'S OTHER NEWS

Lenders start pulling best buy fixed rates

Record low fixed rate mortgages may already be a thing of the past as lenders start pulling rates.

New research from Moneyfacts.co.uk suggests the days of all-time low five-year fixed rates are now over.

It says that with talk of a base rate rise "reaching fever-pitch" we are already seeing an end to the rate cutting trend.

The cheapest five-year fix at 65% has jumped 20 basis points (bps) from 2.14% to 2.34% since July, while the cheapest 60% LTV deal is also up 20 bps from 2.09% to 2.29%.

The cheapest five-year fixed rate at 70% LTV is now 2.43%, up from 2.34% in July and August.

At 75% LTV, the cheapest deal has crept up to 2.48% in September, against 2.44% in July and August.

Charlotte Nelson, finance expert at Moneyfacts, says: “While competition in the mortgage market remains high, it’s clear that record low rates are starting to disappear.

“Speculation of a base rate rise has affected wholesale costs, so providers have had little option but to raise their rates.

“Five-year fixed rates have been particularly affected as the likelihood of a base rate rise within the next five years is high.

“For instance, the average five-year fixed rate at 60% loan-to-value has increased from 2.54% to 2.66% in the space of just two months."

Nelson said borrowers typically fixed for two years but committing to a cheap five-year deal now should pay off if base rates do rise, especially if we see several consecutive increases.

"A small rise of just 0.25% on today’s average standard variable rate (SVR) of 4.84% would cost borrowers an extra £262 a year.”

Nelson said borrowers need to act now to take advantage of today's low rates that may quickly be withdrawn.

“Long-term fixed mortgage rates are still very low in comparison with a year ago, so borrowers who are sitting on their SVR or coming to the end of their mortgage deal need to decide whether they are willing to miss the opportunity to fix to a low rate.”

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