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Mortgage rates - are they doubling?

Journalist: Samantha Downes, Currently at the I (business editing some Sundays (freelance) and Mortgage Solutions

ended 13. May 2022

L&C has published some research, which shows the typical repayment mortgage is now more than £100 higher. I'm looking for any good rates/comment/advice for a news piece I need to put up by lunchtime today - thank you so much and for you help with my other news pieces.

 "Mortgage rates have more than doubled since the historic low recorded in October last year, according to analysis by L&C Mortgages.

The average of the keenest low loan-to-value (LTV) two- and five-year remortgage rates from the top ten lenders has continued to escalate this year, to 2.36% and 2.46% respectively.

This has increased from the historic lows of 0.89% and 1.05% respectively last October.

L&C’s remortgage tracker shows that the monthly payment on a typical £150,000 repayment mortgage is now more than £100 higher than at the low, pushing annual mortgage payments up by more than £1200 per annum.

 



 

4 responses from the Newspage community

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Imran Hussain
Director at Harmony Financial Services
Mortgage interest rates are still low in comparison to rates pre 2008 there is no need to panic just go and seek professional advice if you are worried about your current rate or for some crazy reason you are on variable rate advisors have been banging on about rates not remaining at an all-time low for the past 2 -3 years now so nobody should be surprised rates have risen and the bank of england will most likely continue to rise the base rate for the foreseeable future to combat inflation, anyone currently on a fixed-rate mortgage product has nothing to worry about but if you are due to remortgage within the next 12 months don't expect super low rates like when your first took your mortgage out especially if you purchased your property in the last 3 years when rates at times have been sub 1% for those with masses of equity or deposits.
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Scott Taylor-Barr
Principal Adviser at Barnsdale Financial Management
"The key thing to take away from this research is the phrase “historic lows”. What we are seeing is rates adjusting towards a more historically normal level, something we’ve not seen for a long time due to the policy of central banks and Governments to keep rates low, something that could never be sustained long term. To quote The Hitchhiker’s Guide to the Galaxy “DON’T PANIC!”. Whilst interest rates may have doubled, or even tripled, as the vast majority of mortgages are on a repayment basis the actual payment you make does not follow suit; as a good chunk of your monthly payment is paying down the capital, so it’s just the interest element that rises. Also, unless you are currently looking to move, or your present deal is ending, these increases won’t be impacting you at the moment. That being said, everyone’s deal ends at some point, so it’s never been more necessary to get good quality, professional mortgage advice when looking at your mortgage. Advisers can not only make the process a lot less stressful, but can also access lenders that do not deal directly with the public."
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Rhys Schofield
Brand Director at Peak Mortgages and Protection
"Brokers have been sounding the clarion call to implore consumers to act for months now and procrastinating is costing clients dearly in extra repayments as rates march upwards. The pace of change is scary. We're seeing some lenders like Santander increase rates twice in a week. Blink and you miss a deal. The drift is only one way at the moment so my genuine advice is that if you're on your standard variable rate, or are within the last 6 months of your current fixed rate, you need to get on Google, search for mortgage advice near you, and call whoever has the best reviews ASAP."
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Paul Neal
Mortgages & Equity Release Advisor at First Choice Financial Services
"Mortgages can be expensive business, these days. Rates have shot up quickly in recent and that, coupled with the cost of living crisis, will meany many people have to sell a kidney to heat the house. Rate aren't actually that bad at the moment, people are comparing them to the sub-1% deals seen at the back end of next year. What is compounding matters is that everything else on top is getting expensive. Now is the time to cut back on the cheeky Nandos and, if you are coming towards the end of your fixed term, now is the time to start looking at a better deal. Advice, in the current climate, has never been as important."