Two-year fixed-rate mortgages have reached their highest level in nearly ten years, after exceeding four per cent for the first time since 2013.
Moneyfacts reported the average two-year fixed-rate product has hit 4.09 per cent, rising by 0.14 per cent since the start of August. The last time the figure was this high was in February 2013, while it was a much lower 2.34 per cent in December 2021.
At the same time, five-year fixed-rate mortgages have risen by 0.16 per cent over the month, reaching 4.24 per cent. This is a growth of 1.6 per cent from December last year, showing just how much mortgage rates have increased in nine months.
As a result, mortgage products now only last 17 days, with the shelf life hitting a record low. This is due to the speed at which rates are increasing and mortgage providers are needing to change their products to keep up with the changes.
For homebuyers, it means they have “the shortest length of time we have ever recorded to try to secure their deal of choice”.
Property expert Phil Spencer has issued advice to help those wanting to get on or climb the property ladder in this difficult time.
Writing in the Evening Standard, the Location, Location, Location presenter told buyers not to panic.
“[If] you’re at a viewing with 25 other buyers, it’s understandable that you’d be tempted to jump in and buy whatever you can. Now is not the time to do that,” Spencer wrote.
He reminded the public that a “good flat will always be a good flat, a rubbish flat will be a rubbish one”, so it is essential not to purchase a property that will be hard to sell later down the line.
When it comes to choosing mortgage products, he advised to get a fixed rate, even considering ten-year products for better deals.
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