Mortgage Rates Climb
As the mortgage market continues to deal with the fallout from the Growth Plan and rate rises, news came last week that the average five-year mortgage rate has nearly reached a 12-year high, with the typical deal now topping 6%. The last time this average figure breached 6% was in January 2010. The average two-year fixed rate, which stood at 4.74% at the beginning of October has also risen to over 6%, its highest since November 2008, during the onset of the financial crisis. Wind the clock back one year to October 2021, the average two- and five-year rates were 2.25% and 2.55% respectively.
The Chancellor met with major UK lenders, including Barclays and Natwest last week, for discussions which included recent developments in the mortgage market. In a statement following the meeting, the Treasury outlined, ‘While it is the responsibility of the sector to provide the best value for mortgage rates, the Chancellor confirmed that the Treasury would continue to work closely with the sector in the weeks and months ahead.’
The Chancellor has been asked by lenders to extend the government’s mortgage guarantee scheme due to expire at the end of 2022, which offers government underwriting for 5% deposit mortgages