Average fixed mortgage rates start to rise

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Eleanor Williams, Press Officer
Eleanor Williams, Press Officer / Finance Expert T: 01603 476205 E: Email Eleanor
08/11/2021

Average fixed mortgage rates start to rise

Average fixed mortgage rates start to rise

Following significant rate competition over recent months, data from the latest Moneyfacts UK Mortgage Trends Treasury Report shows that, following re-pricing and range amendments from lenders, the overall average two- and five-year fixed rates have risen month-on-month for the first time since June 2021.

 

Following significant rate competition over recent months, data from the latest Moneyfacts UK Mortgage Trends Treasury Report shows that, following re-pricing and range amendments from lenders, the overall average two- and five-year fixed rates have risen month-on-month for the first time since June 2021.

 

  • After four consecutive months of falls, both the overall average two- and five-year fixed rates rose by 0.04% month-on-month, to 2.29% and 2.59% respectively. However, it is fair to note that when compared to November 2020, these rates remain 0.14% and 0.11% lower, and both are 0.16% lower than their equivalents two years ago.
  • The rises in the overall average fixed rates this month were fuelled by rate increases recorded across the loan-to-value (LTV) tiers at 75% or less, with the most significant re-pricing occurring in the 65% LTV bracket where the two- and five-year fixed averages went up by 0.39% and 0.38%, to 2.50% and 2.70% respectively.
  • However, with an uplift of 217 more products on offer since last month, taking the total available to 5,156, the number of residential mortgages has exceeded 5,000 for the first time since March 2020 (5,222), with the most notable increase in choice at 90% and 95% LTV where the number of options rose by 57 and 23 products respectively.
  • After four consecutive months of falls, both the overall average two- and five-year fixed rates rose by 0.04% month-on-month, to 2.29% and 2.59% respectively. However, it is fair to note that when compared to November 2020, these rates remain 0.14% and 0.11% lower, and both are 0.16% lower than their equivalents two years ago.
  • The rises in the overall average fixed rates this month were fuelled by rate increases recorded across the loan-to-value (LTV) tiers at 75% or less, with the most significant re-pricing occurring in the 65% LTV bracket where the two- and five-year fixed averages went up by 0.39% and 0.38%, to 2.50% and 2.70% respectively.
  • However, with an uplift of 217 more products on offer since last month, taking the total available to 5,156, the number of residential mortgages has exceeded 5,000 for the first time since March 2020 (5,222), with the most notable increase in choice at 90% and 95% LTV where the number of options rose by 57 and 23 products respectively.

Mortgage market analysis

 

Nov-19

Nov-20

Sep-21

Oct-21

Nov-21

Fixed and variable rate products

Total product count - all LTVs

5,077

2,404

4,812

4,939

5,156

Product count - 95% LTV

374

12

283

293

316

Product count - 90% LTV

761

56

579

610

667

All LTVs

Average two-year fixed rate

2.45%

2.43%

2.38%

2.25%

2.29%

Average five-year fixed rate

2.75%

2.70%

2.63%

2.55%

2.59%

95% LTV

Average two-year fixed rate

3.27%

4.74%

3.57%

3.32%

3.22%

Average five-year fixed rate

3.60%

4.21%

3.83%

3.63%

3.51%

65% LTV

Average two-year fixed rate

1.99%

2.01%

2.15%

2.11%

2.50%

Average five-year fixed rate

2.18%

2.23%

2.41%

2.32%

2.70%

Data shown is as at the first available day of the month, unless stated otherwise. Source: Moneyfacts Treasury Reports

Mortgage market analysis

 

Nov-19

Nov-20

Sep-21

Oct-21

Nov-21

Fixed and variable rate products

Total product count - all LTVs

5,077

2,404

4,812

4,939

5,156

Product count - 95% LTV

374

12

283

293

316

Product count - 90% LTV

761

56

579

610

667

All LTVs

Average two-year fixed rate

2.45%

2.43%

2.38%

2.25%

2.29%

Average five-year fixed rate

2.75%

2.70%

2.63%

2.55%

2.59%

95% LTV

Average two-year fixed rate

3.27%

4.74%

3.57%

3.32%

3.22%

Average five-year fixed rate

3.60%

4.21%

3.83%

3.63%

3.51%

65% LTV

Average two-year fixed rate

1.99%

2.01%

2.15%

2.11%

2.50%

Average five-year fixed rate

2.18%

2.23%

2.41%

2.32%

2.70%

Data shown is as at the first available day of the month, unless stated otherwise. Source: Moneyfacts Treasury Reports

Eleanor Williams, Finance Expert at Moneyfacts, said:

“Recent competition in the mortgage sector saw the launch of record-low initial rates as providers competed for predominantly low risk business from borrowers with higher deposits or levels of equity and which saw average rates reduce. However, the start of November marks a reverse in the average rate cut trend; while still lower than their year-on-year equivalents, the overall average two- and five-year fixed rates have increased for the first time since June, with both rates rising by 0.04%.

“This can be attributed to rate re-pricing in the lower-LTV tiers, where we recorded increases in the average fixed rates in each of the LTV brackets at 75% and lower this month. The most noteworthy shifts were recorded at 65% LTV where the two-year fixed average went up by 0.39% and the five-year equivalent by 0.38%, to 2.50% and 2.70% respectively. This two-year average is now the highest we have recorded since June 2013 when it reached 2.77%.

“In contrast to this, borrowers with smaller deposits or amounts of equity who may have spent much of the past 18 months with few options available to them have seen continued improvements in the level of choice on offer this month, with the number of products on offer at 90% LTV and above at its highest level since March 2020. There were also further reductions in the average rates in these higher LTV tiers, where, following a 0.10% month-on-month reduction, at 3.22% the average two-year fixed rate at 95% LTV is now the lowest it has been since February 2020.

“As the market remains unsettled, borrowers may consider this an opportune time to explore securing a new deal, as there is no guarantee that rates will not continue to increase in the months to come. Seeking out independent financial advice to assess the changing market is vital to ensure the best possible deal can be secured considering the rate, associated fees and incentives.”

Eleanor Williams, Finance Expert at Moneyfacts, said:

“Recent competition in the mortgage sector saw the launch of record-low initial rates as providers competed for predominantly low risk business from borrowers with higher deposits or levels of equity and which saw average rates reduce. However, the start of November marks a reverse in the average rate cut trend; while still lower than their year-on-year equivalents, the overall average two- and five-year fixed rates have increased for the first time since June, with both rates rising by 0.04%.

“This can be attributed to rate re-pricing in the lower-LTV tiers, where we recorded increases in the average fixed rates in each of the LTV brackets at 75% and lower this month. The most noteworthy shifts were recorded at 65% LTV where the two-year fixed average went up by 0.39% and the five-year equivalent by 0.38%, to 2.50% and 2.70% respectively. This two-year average is now the highest we have recorded since June 2013 when it reached 2.77%.

“In contrast to this, borrowers with smaller deposits or amounts of equity who may have spent much of the past 18 months with few options available to them have seen continued improvements in the level of choice on offer this month, with the number of products on offer at 90% LTV and above at its highest level since March 2020. There were also further reductions in the average rates in these higher LTV tiers, where, following a 0.10% month-on-month reduction, at 3.22% the average two-year fixed rate at 95% LTV is now the lowest it has been since February 2020.

“As the market remains unsettled, borrowers may consider this an opportune time to explore securing a new deal, as there is no guarantee that rates will not continue to increase in the months to come. Seeking out independent financial advice to assess the changing market is vital to ensure the best possible deal can be secured considering the rate, associated fees and incentives.”

Notes to editors

Pioneering financial comparison technology for over 30 years.

Moneyfacts Group plc is the UK’s leading provider of retail financial product data. Used by virtually every bank and building society in the UK, and supplied to the Bank of England, Financial Conduct Authority, Financial Ombudsman Service, HM Treasury, Prudential Regulatory Authority and UK Finance.

Our expert research team monitors the thousands of mortgages, savings, credit card, personal loan, business banking, life, pension and investment products in the UK.

Moneyfacts is the UK's leading independent provider of finance product data. For over 30 years Moneyfacts' information has been a key driver behind personal finance product decisions.

For more information about us please see our key facts.

Broadcast

Our broadcast suite enables our finance experts to appear in-vision for television, and we regularly comment live on national and regional radio.

To arrange an interview for radio or television, please contact our press department. We have an in-house broadcast room with ISDN (01603 230551) and Skype (Moneyfacts).

 

Notes to editors

Pioneering financial comparison technology for over 30 years.

Moneyfacts Group plc is the UK’s leading provider of retail financial product data. Used by virtually every bank and building society in the UK, and supplied to the Bank of England, Financial Conduct Authority, Financial Ombudsman Service, HM Treasury, Prudential Regulatory Authority and UK Finance.

Our expert research team monitors the thousands of mortgages, savings, credit card, personal loan, business banking, life, pension and investment products in the UK.

Moneyfacts is the UK's leading independent provider of finance product data. For over 30 years Moneyfacts' information has been a key driver behind personal finance product decisions.

For more information about us please see our key facts.

Broadcast

Our broadcast suite enables our finance experts to appear in-vision for television, and we regularly comment live on national and regional radio.

To arrange an interview for radio or television, please contact our press department. We have an in-house broadcast room with ISDN (01603 230551) and Skype (Moneyfacts).

 

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Rachel Springall Press Officer / Finance Expert
Eleanor Williams Press Officer / Finance Expert