Particle.news
Get it on Google Play
Download on the App Store
15 ARTICLES
·
15h ago

UK Five-Year Fixed Mortgage Rate Hits 6.00%

Rising swap rates and higher gilt yields linked to inflation fears from recent Middle East hostilities have pushed lenders to withdraw cheap fixed products and lift prices for borrowers.

This San Francisco home in the St. Francis Wood neighborhood was listed at $4.5 million. It attracted six offers, five-all-cash, and closed for $6.6 million last week.
This San Francisco home in the St. Francis Wood neighborhood was listed at $4.5 million. It attracted six offers, five-all-cash, and closed for $6.6 million.
Image
U.S. dollar banknotes are seen in this illustration taken March 10, 2023. REUTERS/Dado Ruvic/Illustration/File Photo

Overview

  • The average five-year fixed mortgage rate reached 6.00% on Monday, marking the highest level in about three years and closing the gap with two-year fixes that sit near 5.98%.
  • Choice at the cheapest end of the market has collapsed with sub-5% fixed deals falling from about 1,494 at the start of September to just nine for Great Britain, according to Moneyfacts data.
  • Lenders set fixed pricing from swap rates, which have risen because investors expect higher inflation and interest rates, while gilt yields have climbed as markets reassess future borrowing costs.
  • Major banks repeatedly raised fixed offers in recent weeks, leaving homeowners rolling off very low 2021–22 deals facing much higher monthly payments and prompting some borrowers to consider variable or tracker products instead.
  • The repricing is not limited to the UK as US 30-year mortgage rates rose to about 7.49% and mortgage applications fell sharply, showing tighter global housing finance and reduced buying and refinance activity.