Average rates for two-year fixed-rate mortgages have reached a 19-month high, market analysis has revealed.
Average rates for two-year fixed-rate mortgages have reached a 19-month high, market analysis has revealed.
According to the Moneyfacts Trends Treasury Report the interest on two-year deals has risen for the second month running to levels not seen since September 2016.
Even in the last month the products have increased by 0.04%, putting the average rate of a two-year fix at 2.43%.
Moneyfacts thinks the rise could be down to lenders pushing up rates in advance of the predicted Bank of England interest rate rise.
However, there are other theories as to why the cost is going up.
Charlotte Nelson, finance expert at Moneyfacts, said: “The increase in the average two-year fixed rate may also have been affected by the withdrawal of products from the 60% loan to value (LTV) sector.
“In fact, the total number of 60% LTV products has fallen below 500 for the first time since September 2016, reaching 495 today.
“In recent years, the 60% LTV market has been booming. There have been vast numbers of products introduced, often at record lows, to attract borrowers who are looking to remortgage.
“However, with the base rate rise looming, providers could be withdrawing deals in anticipation of this. Alternatively, it could be as a result of finding themselves oversubscribed by borrowers, who will be looking to get a better deal before rates start to rise further.”
