Best of the Week
Most Popular
1. Gold Final Warning: Here Are the Stunning Implications of Plunging Gold Price - P_Radomski_CFA
2.Fed Balance Sheet QE4EVER - Stock Market Trend Forecast Analysis - Nadeem_Walayat
3.UK House Prices, Immigration, and Population Growth Mega Trend Forecast - Part1 - Nadeem_Walayat
4.Gold and Silver Precious Metals Pot Pourri - Rambus_Chartology
5.The Exponential Stocks Bull Market - Nadeem_Walayat
6.Yield Curve Inversion and the Stock Market 2019 - Nadeem_Walayat
7.America's 30 Blocks of Holes - James_Quinn
8.US Presidential Cycle and Stock Market Trend 2019 - Nadeem_Walayat
9.Dear Stocks Bull Market: Happy 10 Year Anniversary! - Troy_Bombardia
10.Britain's Demographic Time Bomb Has Gone Off! - Nadeem_Walayat
Last 7 days
Stock Market Due for 9-10% Pull Back? - 25th April 19
Dow Transportation Stocks Sector Is Testing Resistance - 25th April 19
INSOMNIA i64 UK Best Games Festival Vlog of What it's Like to Attend - 2019 - 25th April 19
In Just 45 Mins., Learn to Spot New Opportunities in ANY Market for FREE! - 25th April 19
If This Pattern Holds True, the US Economy Could Face the Worst Stagnation in History - 25th April 19
8 Reasons Why Investment in Education Always Pays Off - 25th April 19
Want To Earn A Safe 5% In Fixed Income? Buy Preferred Stocks - 24th April 19
Can Gold Price Rise Without a Rate Cut?  - 24th April 19
Silver’s Next Big Move - 24th April 19
How Can a College Student Invest Wisely? - 24th April 19
Prepare For Unknown Stock Market Price Action As New Highs Are Reached - 23rd April 19
Silver Plays a Small but Vital Role in Every Portfolio - 23rd April 19
Forecasting 2020s : Two Recessions, Higher Taxes, and Japan-Like Flat Markets - 23rd April 19
Gold and Silver Give Traders Another Buying Opportunity - 23rd April 19
Stock Market Pause Should Extend - 21st April 19
Why Gold Has Been the Second Best Asset Class for the Last 20 Years - 21st April 19
Could Taxing the Rich Solve Income Inequality? - 21st April 19
Stock Market Euphoria Stunts Gold - 20th April 19
Is Political Partisanship Killing America? - 20th April 19
Trump - They Were All Lying - 20th April 19
The Global Economy Looks Disturbingly Like Japan Before Its “Lost Decade” - 19th April 19
Growing Bird of Paradise Strelitzia Plants, Pruning and Flower Guide Over 4 Years - 19th April 19
S&P 500’s Downward Reversal or Just Profit-Taking Action? - 18th April 19
US Stock Markets Setting Up For Increased Volatility - 18th April 19
Intel Corporation (INTC) Bullish Structure Favors More Upside - 18th April 19
Low New Zealand Inflation Rate Increases Chance of a Rate Cut - 18th April 19

Market Oracle FREE Newsletter

Top 10 AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

72% of the Base Interest Rate Rise Already Factored into Mortgage Fixed Rates

Interest-Rates / Mortgages Aug 13, 2018 - 03:47 PM GMT

By: MoneyFacts

Interest-Rates

Moneyfacts UK Mortgage Trends Treasury Report data, not yet published, highlights that two-year fixed rates were already on the rise before the Bank of England’s announcement earlier this month, with the average two-year fixed rate having risen by 0.18% since January 2018.



Charlotte Nelson, Finance Expert at Moneyfacts, said:

“The month-on-month figures show little movement, with the average two-year fixed mortgage rate increasing by just 0.01% in August to 2.53%. However, back in January the average rate stood at 2.35%, 0.18% lower than this month’s figure.

“This sizeable increase to the two-year fixed rate average clearly shows lenders had predicted that a rate rise was on the horizon since the start of the year. As a result, by the August announcement, 72% of mortgage rates had already factored the 0.25% rate rise into their two-year fixed mortgage rates during the first half of the year.

“Unlike in the run-up to the Bank of England’s rate increase in November 2017, the lead-up to this base rate rise saw the mortgage market lack activity, with rates and product numbers remaining relatively static. This is largely due to the significantly amount of activity in the mortgage market prior to the May announcement.

“Expectations of a base rate rise were high in May, with the vast majority of providers increasing their rates in anticipation and as a direct reaction to the much higher SWAP rates at the time. However, the subsequent lack of movement in base rate had little impact on the average two-year fixed rate.

“It seems that instead of reducing rates to their former levels, providers chose to wait and see if a base rate rise was likely. They did not have to wait long, but while the Bank of England has increased the rate, it appears that the static nature of the two-year fixed rate market is set to continue, with providers almost reaching an equilibrium.

“In comparison, the Moneyfacts UK Mortgage Trends Treasury Report shows the average two-year tracker rate fell after the expected rate rise in May failed to come to fruition while in the lead-up to August’s announcement the rate rose slightly, increasing by 0.03% to 1.95%. This is to be expected however, as tracker rates are more aligned with base rate and LIBOR and are therefore more susceptible to any rise or fall these markets may see.

“This should be a stark warning for borrowers as mortgage rates have been on the rise without the need of a base rate increase by the Bank of England. Any borrower sitting on their standard variable rate or coming to the end of a deal should remortgage as soon as possible to ensure they get the most cost-effective product possible.”

The Moneyfacts UK Mortgage Trends Treasury Report provides an in-depth monthly review of today’s changing mortgage trends, including all the relevant facts on the UK’s residential and buy-to-let markets.

moneyfacts.co.uk is a financial product price comparison site, launched in 2000, which helps consumers compare thousands of financial products, including credit cards, savings, mortgages and many more. Unlike other comparison sites, there is no commercial influence on the way moneyfacts.co.uk ranks products, showing consumers a true picture of the best products based on the criteria they select. The site also provides informative guides and covers the latest consumer finance news, as well as offering a weekly newsletter.

MoneyFacts Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules