Fixed rate mortgage interest rates on the rise

New research finds that rates on fixed rate mortgages are increasing, despite the static Bank of England Base Rate.

Mortgage rates are starting to increase, according to recent research.

Mortgage swap rates, the rate at which banks lend to each other, are on the rise. And that is feeding through to fixed rate mortgages, according to new research by financial data provider Moneyfacts.

There is also the winding down of the Government’s Funding for Lending scheme, which offered cheap borrowing to banks and building societies. In turn, they were supposed to pass on the cheaper rates to mortgage borrowers.

These rate rises come despite the Bank of England Base Rate remaining at 0.5%, which illustrates once again how the mortgage market can and does operate independently of this.

See the latest mortgage rates and get expert advice

Increasing rates

Moneyfacts cites the example of a Post Office five-year fixed rate mortgage being offered to borrowers with a 20% deposit. Back in January the initial five-year interest rate was 3.29%. It has now increased to 3.34%. The fee has remained the same at £1,495.

Another example is a five-year fix from Yorkshire Building Society requiring a deposit of 25%. The initial five-year interest rate on that is now 3.09%, whereas back in January it was 2.84%. The fee is the same at £975.

Several fixed rate mortgages offered as part of the Government's Help to Buy scheme mortgage guarantee to people with a 5% deposit have also risen. HSBC's five-year fix has gone up from 4.99% to 5.19%, while Chelsea Building Society's fee-free five-year fix has gone from 5.19% to 5.69%.

Meanwhile, NatWest and Royal Bank of Scotland have just announced rate rises of up to 0.4% across their whole fixed rate mortgage range.

Property services company LMS also reports rates rising for remortgagers.

So if you’re in the market either for a new loan or a remortgage, you're better off acting sooner rather than later.

Top rates right now

Let's take a look at the top fixed rates right now, starting with two-year rates on a range of mortgages (the percentage you need to borrow is called the loan to value).

And now here are the top five-year fixed rates.

If you're in the market for an offset mortgage, you can expect to add around 0.20% to the fixed rates above.

Changes to mortgage rules

As well as rising rates, actually getting approval for a mortgage is getting harder. The introduction of new regulation, known as the Mortgage Market Review, tomorrow (26th April) means lenders have to take a much closer look at your finances before lending to you.

You can read more on these changes in Mortgage Market Review: why finding a mortgage is set to get harder.

See the latest mortgage rates and get expert advice

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Help to Buy mortgages explained