Average fixed-rate mortgage prices rose this week as lenders made rounds of rate hikes, according to the latest Moneyfacts Rate Watch.
The average two-year fix now costs 5.67%, up 7bps from 5.6% last week. Meanwhile the typical five-year fix now costs 5.72%, an 8bps rise from last week’s 5.64%.
In total, 28 lenders made mortgage product changes this week, with 20 either increasing rates or making mixed repricing changes, compared with just three lenders making net cuts.
Moneyfacts said: “The latest mortgage rate increases come as wholesale funding costs have risen sharply.
“Two-year swap rates have climbed from 4.33% to around 4.6%, while five-year swaps have risen from 4.43% to around 4.7% since 4 September. The rise follows the European Central Bank increasing its bank rate, which has strengthened market expectations that other central banks, including the Bank of England, could also be forced to raise rates in the months ahead.
“Mortgage rates have only just caught up with earlier increases in swap rates, meaning lenders will now face further pressure to reprice. Unless swap rates fall back significantly, borrowers need to be prepared for further mortgage rate increases in the weeks ahead.”