Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
S&P Stock Market Trend Forecast to Dec 2024 - 16th Apr 24
No Deposit Bonuses: Boost Your Finances - 16th Apr 24
Global Warming ClImate Change Mega Death Trend - 8th Apr 24
Gold Is Rallying Again, But Silver Could Get REALLY Interesting - 8th Apr 24
Media Elite Belittle Inflation Struggles of Ordinary Americans - 8th Apr 24
Profit from the Roaring AI 2020's Tech Stocks Economic Boom - 8th Apr 24
Stock Market Election Year Five Nights at Freddy's - 7th Apr 24
It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- 7th Apr 24
AI Revolution and NVDA: Why Tough Going May Be Ahead - 7th Apr 24
Hidden cost of US homeownership just saw its biggest spike in 5 years - 7th Apr 24
What Happens To Gold Price If The Fed Doesn’t Cut Rates? - 7th Apr 24
The Fed is becoming increasingly divided on interest rates - 7th Apr 24
The Evils of Paper Money Have no End - 7th Apr 24
Stock Market Presidential Election Cycle Seasonal Trend Analysis - 3rd Apr 24
Stock Market Presidential Election Cycle Seasonal Trend - 2nd Apr 24
Dow Stock Market Annual Percent Change Analysis 2024 - 2nd Apr 24
Bitcoin S&P Pattern - 31st Mar 24
S&P Stock Market Correlating Seasonal Swings - 31st Mar 24
S&P SEASONAL ANALYSIS - 31st Mar 24
Here's a Dirty Little Secret: Federal Reserve Monetary Policy Is Still Loose - 31st Mar 24
Tandem Chairman Paul Pester on Fintech, AI, and the Future of Banking in the UK - 31st Mar 24
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

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

© 2005-2022 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