Homebuyers who need a mortgage to buy their next property have been advised not to wait much longer, as interest rates are continuing to rise.
According to Moneyfacts, the two-year fixed-rate average is now 2.86 per cent, which is the highest it has been since June 2015 when it reached 2.87 per cent.
Similarly, the average five-year fixed-rate product hit 3.01 per cent, having increased by 0.13 per cent over the last month, which is the greatest level it has been since October 2016.
Tracker mortgages also rose recently, with the two-year products increasing by 0.63 per cent from December 2021 to 2.21 per cent. At the same time, the average standard variable rate grew to 4.71 per cent in April, having risen by 0.31 per cent since the end of last year.
Finance expert at Moneyfacts Eleanor Williams advised: “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.”
She noted that mortgage products in April were only available for 21 days, which suggests prices are continuing to increase, as providers do not want to offer mortgages for long in case rates rise in the meantime.
Ms Williams stated many homebuyers might wish to consider a longer-term mortgage, such as a five-year fixed-rate product, as this will “provide shelter from potential further rate volatility”.
According to the latest Halifax House Price Index, the average house price in the UK was £282,753 in March 2022, rising by 1.4 per cent over the preceding month and as much as 11 per cent since March 2021.
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