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Average fixed rates highest in over five years

Image of a Moneyfacts Mortgage Treasury Report Image of a Moneyfacts Mortgage Treasury Report Image of a Moneyfacts Mortgage Treasury Report
Eleanor Williams, Press Officer
Eleanor Williams, Press Officer / Finance Expert T: 01603 476205 E: Email Eleanor
11/04/2022

Average fixed rates highest in over five years

Average fixed rates highest in over five years

Following three back-to-back increases from the Bank of England, data from the latest Moneyfacts UK Mortgage Trends Treasury Report shows that significant rate rises continue to dominate the market, while prospective borrowers may find they have little time to secure their chosen deal as product shelf-life plummets to equal the joint lowest on record.

 

Following three back-to-back increases from the Bank of England, data from the latest Moneyfacts UK Mortgage Trends Treasury Report shows that significant rate rises continue to dominate the market, while prospective borrowers may find they have little time to secure their chosen deal as product shelf-life plummets to equal the joint lowest on record.

 

  • At 2.86% the two-year fixed rate average is now the highest on Moneyfacts records since June 2015 (2.87%) having increased by 0.21% since last month. At 3.01% the five-year equivalent is the highest since October 2016 (3.02%) following a 0.13% month-on-month increase. With only 0.15% separating these two rates, the margin between these is the smallest since February 2013 (0.08%).
  • The average two-year tracker rate for all loan-to-values (LTVs) rose by 0.18% month-on-month to 2.21%. This is an increase of 0.63% since December 2021 – almost in line with the 0.65% rise base rate has experienced over the same time period.
  • This month also saw the average Standard Variable Rate (SVR) increase again, rising by 0.10% to 4.71% this month. Since December 2021 this has risen by 0.31% and is at a two-year high (April 2020 – 4.71%).
  • Borrowers hoping to secure a new mortgage product will see that shelf-life has plunged to 21 days again as providers continue to update their offerings. This is the joint lowest on our records, last seen in August 2021 (21 days).
  • At 2.86% the two-year fixed rate average is now the highest on Moneyfacts records since June 2015 (2.87%) having increased by 0.21% since last month. At 3.01% the five-year equivalent is the highest since October 2016 (3.02%) following a 0.13% month-on-month increase. With only 0.15% separating these two rates, the margin between these is the smallest since February 2013 (0.08%).
  • The average two-year tracker rate for all loan-to-values (LTVs) rose by 0.18% month-on-month to 2.21%. This is an increase of 0.63% since December 2021 – almost in line with the 0.65% rise base rate has experienced over the same time period.
  • This month also saw the average Standard Variable Rate (SVR) increase again, rising by 0.10% to 4.71% this month. Since December 2021 this has risen by 0.31% and is at a two-year high (April 2020 – 4.71%).
  • Borrowers hoping to secure a new mortgage product will see that shelf-life has plunged to 21 days again as providers continue to update their offerings. This is the joint lowest on our records, last seen in August 2021 (21 days).

Mortgage market analysis

 

Apr-20

Apr-21

Mar-22

Apr-22

Fixed and variable rate products

Total product count - all LTVs

3,192

3,842

4,838

4,925

All LTVs

Average two-year fixed rate

2.36%

2.58%

2.65%

2.86%

Average five-year fixed rate

2.66%

2.77%

2.88%

3.01%

SVR

4.71%

4.41%

4.61%

4.71%

Average two-year tracker rate

1.88%

2.27%

2.03%

2.21%

All products

Shelf-Life (days)

48

29

28

21

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

Mortgage market analysis

 

Apr-20

Apr-21

Mar-22

Apr-22

Fixed and variable rate products

Total product count - all LTVs

3,192

3,842

4,838

4,925

All LTVs

Average two-year fixed rate

2.36%

2.58%

2.65%

2.86%

Average five-year fixed rate

2.66%

2.77%

2.88%

3.01%

SVR

4.71%

4.41%

4.61%

4.71%

Average two-year tracker rate

1.88%

2.27%

2.03%

2.21%

All products

Shelf-Life (days)

48

29

28

21

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:

“Those hoping to secure a new mortgage may wish to act sooner rather than later to lock in a competitive option, as not only have average rates continued on an upwards trajectory this month, but prospective borrowers may find that their selected products are not on offer for long. April saw mortgage shelf-life plunge to 21 days, equal to the record low last recorded in August 2021, and reflecting a busy period of re-pricing as lenders have reacted to three back-to-back base rate rises and continued wider economic volatility. 

“Overall average two- and five-year fixed rate mortgages have risen for the sixth consecutive month, both seeing notable monthly increases of 0.21% and 0.13% respectively. This reflects the fact that rates have risen across the majority of the lending tiers again and sees the average two-year fixed rate for all LTVs reach 2.86% - the highest on Moneyfacts records in over six years (June 2015 - 2.87%), while the five-year equivalent has breached 3% for the first time since October 2016 (3.02%).

“While fixed rates are not intrinsically linked to base rate and therefore are not set to rise exactly in line with its fluctuations, it is interesting to note that since December 2021 both the two- and five-year overall average fixed rates have risen by 0.57% and 0.42% respectively. This compares to the average two-year base-rate tracker rate, which has risen by 0.63% since December, which is roughly in line with the 0.65% rise in base rate since then.

“Those on their lender’s SVR may well have already felt the impact of the recent base rate rises from the Bank of England. Moneyfacts data shows that the average SVR has risen more slowly than might have been expected, increasing from 4.40% to 4.71% since December 2021. This is the highest this rate has been in two years (April 2020 – 4.71%) and means that borrowers sitting on the average SVR could potentially reduce their outgoings by over £200* per month by securing a mortgage in line with the current average two-year fixed rate.

“The appeal to switch to a mid-term fixed rate such as a five-year deal over historically cheaper short-term fixed rates based on price has lessened as rates have risen. The margin between two- and five-year average fixed rates has shrunk to just 0.15%, the lowest we have recorded since February 2013 (0.08%). However, as there is no guarantee rates will not continue to climb, the incentive to secure a competitive new fixed rate to provide shelter from potential further rate volatility remains, and as our top tables show, there are still products with extremely competitive rates available, but the support and advice of a broker in securing these could be wise.”

 

* Calculations based on £200,000 outstanding mortgage balance over a 25-year term, with rates of 4.71% or 2.86%.

Eleanor Williams, Finance Expert at Moneyfacts, said:

“Those hoping to secure a new mortgage may wish to act sooner rather than later to lock in a competitive option, as not only have average rates continued on an upwards trajectory this month, but prospective borrowers may find that their selected products are not on offer for long. April saw mortgage shelf-life plunge to 21 days, equal to the record low last recorded in August 2021, and reflecting a busy period of re-pricing as lenders have reacted to three back-to-back base rate rises and continued wider economic volatility. 

“Overall average two- and five-year fixed rate mortgages have risen for the sixth consecutive month, both seeing notable monthly increases of 0.21% and 0.13% respectively. This reflects the fact that rates have risen across the majority of the lending tiers again and sees the average two-year fixed rate for all LTVs reach 2.86% - the highest on Moneyfacts records in over six years (June 2015 - 2.87%), while the five-year equivalent has breached 3% for the first time since October 2016 (3.02%).

“While fixed rates are not intrinsically linked to base rate and therefore are not set to rise exactly in line with its fluctuations, it is interesting to note that since December 2021 both the two- and five-year overall average fixed rates have risen by 0.57% and 0.42% respectively. This compares to the average two-year base-rate tracker rate, which has risen by 0.63% since December, which is roughly in line with the 0.65% rise in base rate since then.

“Those on their lender’s SVR may well have already felt the impact of the recent base rate rises from the Bank of England. Moneyfacts data shows that the average SVR has risen more slowly than might have been expected, increasing from 4.40% to 4.71% since December 2021. This is the highest this rate has been in two years (April 2020 – 4.71%) and means that borrowers sitting on the average SVR could potentially reduce their outgoings by over £200* per month by securing a mortgage in line with the current average two-year fixed rate.

“The appeal to switch to a mid-term fixed rate such as a five-year deal over historically cheaper short-term fixed rates based on price has lessened as rates have risen. The margin between two- and five-year average fixed rates has shrunk to just 0.15%, the lowest we have recorded since February 2013 (0.08%). However, as there is no guarantee rates will not continue to climb, the incentive to secure a competitive new fixed rate to provide shelter from potential further rate volatility remains, and as our top tables show, there are still products with extremely competitive rates available, but the support and advice of a broker in securing these could be wise.”

 

* Calculations based on £200,000 outstanding mortgage balance over a 25-year term, with rates of 4.71% or 2.86%.

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.

 

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.

 

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