Mortgages Uncovered

Mortgage brokers claim that money markets are now indicating that interest rates’ are about to move upwards. This will directly reflect on market rates which are the determining factor when it comes to costs of fixed rate mortgage lending which increased from 2.96% two weeks ago to 3.15% yesterday.
The best fixed rate mortgage deal on the market yesterday was with the HSBC, who were offering a five year fixed deal for 3.99% for any borrowers who have a 40% or more deposit.

There are a million people in the UK with an SVR, however, they are being urged to move to a fixed rate deal as there are fears that lenders are about to increase their costs for lending in response to the rising yields on the money markets.

Melanie Bien, of Savills Private Finance, the broker, said: “The cost of wholesale borrowing is expected to rise, which lenders will soon be forced to pass on to mortgage customers. We appear to be near the bottom of the market and homeowners looking for security would be wise to secure a longer-term fix as soon as possible, preferably for five years.”

Ray Boulger, the senior technical manager of John Charcol, another broker, said: “The rise in yields is bad news for homeowners hoping to fix. We are at the bottom of the market for fixed rates and lenders could respond to the events this week by pushing up the cost of fixes as early as next week.”