The average fixed-rate mortgage rate rose this week due to renewed unrest in the Middle East, according to the latest interest rate report from Moneyfacts.
The average two-year fixed rate rose from 5.46% last week to 5.5% on July 17, while the typical average five-year fixed rate rose from 5.48% to 5.52%.
Longer-term fixed rates saw the largest average increases this week, with 10-year fixed rates at 50% LTV rising by 35 basis points to 5.48%.
Meanwhile, the 10-year fix to 100% LTV rose by 25 basis points to 6.7%2, and the five-year fix to 50% LTV rose by 17 basis points to an average of 5.28%.
Caitlin Eastell, personal finance analyst at Moneyfacts, said: “Average mortgage rates rose weekly for the first time since Easter. While a 4 basis point increase may seem ‘small’, it is a reminder of how quickly markets can turn. In just one week, a typical borrower with a £250,000 loan over 25 years could add around an extra £70 a year to their mortgage repayments.
“The recent turmoil in the Middle East has raised expectations that inflation and interest rates will remain higher for longer, leaving lenders with no choice but to reprice products. At the beginning of the month, mortgage interest rates were falling at the fastest pace in almost two years, so the sudden shift could be very frustrating for borrowers.”
The rise was driven by 15 banks increasing interest rates. These included NatWest, which raised fixed interest rates by up to 27 basis points, while Barclays increased interest rates by 7 basis points.
The 35 basis point increases came from lenders such as Furness Building Society, Leek Building Society and Nationwide Building Society.
Fixed interest rate increases (basis points)
- April Mortgages – Fixed rates increased by 25 bits per second.
- Bank of Ireland Brokers – Fixed interest rates increased by Up to 33 bps.
- Bank of Ireland UK – Fixed interest rates increased by Up to 33 bps.
- Barclays – Fixed interest rates increased by Up to 7 bps.
- Coventry Building Society – Fixed rates increased by 20 bps.
- France Building Society – Increasing fixed rates by Up to 35 bps.
- Generation H – increase fixed rates by Up to 25 bps And then Up to 19 bps.
- Leek Building Society – Fixed rates increased by Up to 35 bps.
- Milton Building Society – Fixed rates increased by Up to 20 bps.
- National Building Society – Increase fixed rates by Up to 35 bps.
- NatWest – Fixed prices increased by Up to 27 bps.
- NatWest Intermediary Solutions – Fixed price increase by Up to 27 bps.
- Royal Bank of Scotland – Fixed interest rates increased by Up to 27 bps.
- Vernon Building Society – Fixed rates increased by Up to 30 bps.
- Virgin Money – Fixed rates increased by Up to 35 bps.
Discounts on fixed interest rates
- Nottingham Building Society – Fixed prices reduced by Up to 14 bps.
- Progressive Building Society – Fixed rates have been reduced by Up to 40 bps.
- Brokers Cooperative Bank – Reducing fixed rates by Up to 25 bps.
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