The average price of two-year fixed-rate mortgages has reached 6.75 per cent – the highest in ten years, research from Moneyfacts has stated.
A five-year fixed-rate mortgage now has an average 6.72 per cent rate of interest.
Independent finance information provider Moneyfacts blamed the increase of swap rates to 6.49 per cent on "the curse of Friday 13th".
Fixed-rate deals are often preferable to mortgage and remortgage customers but Moneyfacts predict the increases will be too high, seeing borrowers choose a loan based on their lenders` standard variable rate (SVR) rather than a mortgage deal. "The situation is likely to get worse before it gets better," said Moneyfacts. However, loans based on SVRs may be cheaper. ING Direct offer an SVR of 5.64 per cent, and loans with smaller building societies Stafford Railway, Harpenden and Newbury may be good value. Yesterday Nationwide announced increases of between 0.25 and 0.5 per cent on its mortgage and remortgage deals, a month after cutting some rates by 0.3 per cent.
