Research by L&C has found that rates for mortgage loans from lenders across the UK have been increasing at a sharp rate since the autumn of last year.
This data from the mortgage advice provider reveals that, among the big 10 mortgage lenders, there was an average rise of 1% in the rates for their fixed two-year products. When it came to the fixed five-year loans, the rates rose on average by 0.92% from last October. However, it should be noted that rates before that were at the lowest level the UK market has ever seen.
The fixed two-year rate rises do mean that borrowers will be paying more than £800 extra a year for the same product though, compared with the period before October 2021. Furthermore, there have also been rises in reversionary and standard variable rates during this period by over 0.30% – taking them to 4.14%.
Speaking to Mortgage Introducer, David Hollingworth from L&C said that rates were going up fast because lenders were facing financing challenges, before adding:
“The sheer pace of change is something that could take borrowers by surprise, especially when the cost of living and other outgoings such as energy are already rising too.”
Hollingworth concluded by suggesting that borrowers look into whether a cheaper mortgage than their existing one is available from their lender.
A mortgage advisor who has completed a full CeMAP training course will be better placed than anyone else to help borrowers find out whether they can switch to a more affordable alternative loan.