Mortgage Rates Set to Rise Following Bank Base Rate Hike
Housebuyers seeking fixed-rate mortgages will need to act quickly to avoid increased rates, with some lenders already offering fixed rates above 9%. Despite the rise in rates, mortgage brokers and economists advise housebuyers on tight budgets still to consider fixed-rate loans.
Key Takeaways:
- Halifax is expected to launch a new range of fixed mortgages at higher rates this week, including a five-year fixed rate of 10%.
- Abbey National's current range includes a four-year fix at 9.5% and a 10-year one at 9.99%.
- Ian Darby, marketing director of mortgage broker John Charcol, predicts that a five-year fixed rate would be heading towards 10% if priced at a sensible level in the wholesale market.
- Patrick Bunton of London & Countrywide believes that the biggest increases will be on two-year and three-year money, and that the differential between variable rate and fixed-rate loans over five years will narrow.
- Mortgage brokers and economists advise housebuyers on tight budgets to consider fixed-rate loans despite the increases.
- UBS economists predict a bank base rate of 10% at the end of next year, suggesting that even variable-rate loans will be at 11% or more.
Statistics:
- Halifax's current five-year fixed rate for remortgages is 9.35% (although this rate has been withdrawn).
- Abbey National's current range of fixed rates includes a four-year fix at 9.5% and a 10-year one at 9.99%.
- Charcol is offering a fixed rate of 6.49% until 1 January 1997 for remortgage loans up to 75% of property value and 6.99% up to 95%.
- Moneyfacts is quoting a fixed rate of 1.9% from Yorkshire building society until 1 August 1995; 5.79% from Alliance & Leicester for two years; and 7.25% from National Counties building society until 1 October 1997.
Sources:
- Halifax building society
- Abbey National
- Ian Darby, marketing director of mortgage broker John Charcol
- Patrick Bunton of London & Countrywide
- UBS economists
- Chase de Vere
- Baronworth
- Moneyfacts