Fixed-rate mortgages to rise in price
THE cost of fixed-rate mortgages looks set to increase in the coming days as lenders pass on a rise in the cost of wholesale funding, it was warned yesterday.
Swap rates, upon which fixed-rate deals are based, have risen sharply since the middle of last month, and this is expected to trigger a round of "repricing".
The move will be bad news for those looking to remortgage or buy a home, as about two-thirds of borrowers are opting for fixed-rate loans to take advantage of the current low costs, expecting rates to rise again.
Ray Boulger, senior technical manager at mortgage broker John Charcol, said: "On Monday we saw another sharp rise in swap rates, following closely on from other recent increases.
"The scale of the increase was large enough to be the straw that breaks the camel's back, and I expect several lenders to increase the cost of at least some of their fixed-rate mortgages."
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Monday 28 May 2012
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