Mortgage rates continue to rise despite mini-budget U-turns: Natwest, TSB and Barclays are among the lenders raising the price of new deals to more than 6% after the new chancellor’s offer to calm the markets
- Jeremy Hunt yesterday reversed the ruinous plans of Liz Truss and Kwasi Kwarteng
- But hopes that it could have an instant impact on mortgage deals proved unfounded.
- First-time buyers can expect to pay rates of up to 6.79% for two-year arrangements
Mortgage rates continue to rise despite Chancellor Jeremy Hunt ripping up his predecessor’s disastrous mini-budget.
While the announcement lowered government borrowing costs, falling interest rates on bonds and gilts did not trickle down to mortgage deals.
Reversals of the Kwasi Kwarteng plans by Mr. Hunt were expected to drive down high home purchase deals, but instead they continued to rise.
The average rate on a two-year settlement rose from 4.74 percent last month to 6.47 percent yesterday, Moneyfacts analysts said.
It is equivalent to adding £218 a month to a £200,000 mortgage and is the highest since 2008.
NatWest has increased its five-year fix for buyers from 5.97% to 6.39%.
Prospective first-time homeowners also expect two-year bank rates of up to 6.54 percent.
TSB offers five years at 6.49% and two years at 6.79%.
Today’s mortgage rates for buyers gave a gloomy reading, but the hope is that they start to improve
Foreign Minister Jeremy Hunt yesterday reversed most of the plans of Prime Minister Liz Truss and former Foreign Minister Kwasi Kwarteng.
And Barclays is raising the cost of some low-deposit mortgages to more than 6 percent.
Martin Stewart, founder of mortgage broker London Money, said: ‘He feels a bit calmer with Jeremy Hunt in charge.
“Anyone who wakes up thinking we’re about to go back to where we were last September is kidding themselves.”
Simon Gammon, managing partner at mortgage broker Knight Frank Finance, said: “While we don’t expect mortgage rates to decline any time soon, stability in the swap market should slow the pace of mortgage rate increases relative to some of the The worst”. case scenarios that seemed possible in the days after the mini-budget.’
But Moneyfacts reported yesterday that while rates were still rising, they were doing so at a less alarming pace.
The two-year average settlement today increased marginally from 6.46 percent to 6.47 percent today.
And there has also been an increase in the number of deals on sale, with 3,104 available.
But many of the big banks have rates that would be huge for first-time buyers.
Panic gripped the mortgage market after former Foreign Minister Kwasi Kwarteng’s mini-budget triggered a wave of economic uncertainty.
The average two-year and five-year fixed rates available were 6.47 percent and 6.29 percent, respectively.
Bank of England data shows that more than two million homeowners with fixed-term loans will remortgage between now and the end of 2024
Panic gripped the mortgage market after Mr. Kwarteng’s mini-budget triggered a wave of economic uncertainty.
At the height of the chaos, average bids shot up a percentage point in just one day.
Lenders withdrew nearly 2,000 mortgage products in a week, though many have begun to return to the market at inflated prices.
Bank of England data shows that more than two million homeowners with fixed-term loans will remortgage between now and the end of 2024.
They face paying thousands more when budgets have already been battered.
A report by the Resolution Foundation think tank found that more than five million households will now see their annual mortgage payments increase by around £5,100 between now and 2024.
It forecasts mortgage payments to rise by £26bn by the end of 2024.