The average rate for a tracker mortgage has increased by 0.18% since August 2011 and the average rate for a short-term fixed mortgage has risen by 0.14%, leading to new homeowners seeking the security of a fixed rate mortgage, despite the bank base rate remaining at record lows, report Countrywide.
The top 10 mortgage products sourced by Countrywide customers this week highlighted the broad mix of competitive mortgages with the most sourced mortgage being a Santander mortgage (using Abbey for Intermediaries) with a 75% LTV at a rate of 3.54%.
Nigel Stockton, Financial Services Director at Countrywide comments:
“Rates are likely to continue to rise as pressures in the Eurozone and liquidity in the wholesale funding markets continue well into the New Year.
"Despite these rate rises, mortgages are still 0.96 percent cheaper than in 2009, with the average 75% LTV mortgages now available at a rate of 3.14%.
“Some lenders have reduced the cost of longer-term purchase and remortgage fixed-rate deals, taking a more optimistic medium term view.
"With rates for high loan-to-value mortgages remaining largely static, there is some stability for buyers who have a smaller deposit and are looking for a longer-term fixed rate mortgage the opportunity to get on the property ladder.
"In fact, we have seen a number of major lenders re-enter the 90% LTV sector, with an Abbey 90% LTV 5-year fixed rate mortgage was one of the most sourced mortgages last week by Countrywide customers."
