In recent months, high mortgage interest rates seem to be the only thing the property market has been speaking about, and for a good reason! Figures released by Moneyfacts last week show that current interest rates are now quickly encroaching rates that we haven’t seen in a decade.
It seem like, for the time being, we are all going to have to accept that mortgages aren’t going to be as cheap as we have been used to for a little while. But, that doesn’t mean that you can’t still get a good deal and prepare for when rates do eventually drop again.
What Are Moneyfacts Saying?
Moneyfacts’ figures show that the average two-year fixed mortgage product is currently priced at 3.99%, while in 2012, the rate was 4.62%. The average five-year fixed mortgage product is now 4.14% and was 4.73% 10-years ago. And should you choose to be on one, a 10-year fixed mortgage product is now at an average of 4.19%, it was at 4.83% 10-years previous.
Five years ago, the rates for a two year, five year, and 10-year fixed mortgage averaged at 2.24%, 2.8% and 3.23%. Even at their current levels, these high mortgage interest rates are a far cry away from the 1%, 2%, and 3% rates we have been used to in the last few years. Despite all the doom and gloom, Moneyfacts do note that the average fixed rates have not increased, even when the base rate rose to 1.75%.
Commenting on the newly released date, Moneyfacts have said:
“Average mortgage rates are climbing towards levels not seen in almost decade; this month saw the average overall two-year fixed rate reach the highest level we have recorded in over nine years, while the five-year equivalent for August 2022 isn’t too far behind, breaching 4% for the first time in nearly eight years.
This means that there may well be a number of prospective borrowers who are coming to the end of their current mortgage deal and who may have a bit of a shock when they come to secure a new fixed rate for their next mortgage, as they may face higher costs.
There’s no guarantee that rates won’t continue on this upwards trajectory in the aftermath of recent base rate rises, so it may be wise for prospective borrowers to seek advice and the up-to-date market knowledge of a qualified adviser to support them in checking what mortgage options might be available to them, and whether they can fight the cost of living crisis by locking into a new mortgage deal which may reduce their monthly outgoings.”
What Do The Mortgage Experts Say?
Oportfolio mortgages based in southwest London also commented:
“We have been expecting this for some time. Just by looking at the economy as a whole and trends, we predicted that high mortgage interest rates would soon become normal. That’s why we started contacting all of our existing clients months ago to offer free financial health checks to make sure that they were on the best possible deal and in the best possible position to face the rate increases.
Some people are coming to the end of their current fixed rates and need to get ahead of things to make sure that they are going to go onto a sensible new product. Without the help of an experienced mortgage advisor, thousands of people will end up on a very high interest rate and will lose thousands of pounds a year.
Although we can’t get the rates back down ourselves, we can make sure that your mortgage is manageable until rates do eventually come back down.”
If you or anyone else you know is concerned about high mortgage interest rates, please give our team of friendly and helpful advisors a call today to see how we can help.