Two-year mortgage rates have hit their highest level since July 2016, indicating that those thinking of remortgaging their homes would be wise to do so sooner rather than later.
The average fixed-rate on a two-year deal currently stands at 2.5%, according to research from Moneyfacts.co.uk.
Rates have been gradually increasing since September 2017, when the average two-year fix was priced at 2.17%.
Many finance experts are predicting an official Bank of England base rate rise in the coming weeks, which could see current and prospective homeowners paying more for their mortgage debt.
If a rate rise goes ahead, this will be the second in a matter of months, after the Bank of England increased the base rate to 0.5% in November 2017. This was the first base rate rise in almost a decade.
Charlotte Nelson, from Moneyfacts.co.uk said: “The mortgage market is experiencing a period of upheaval, with rates that were once at all-time lows now starting to rise.
“In the lead-up to May’s base rate announcement, both the interest swap and Libor markets have started to factor in a potential rise.
“Just like before the base rate rose in November, providers now have little choice but to factor in these higher costs into their mortgage pricing.”
With interest rates on the rise, it’s important that homeowners with a variable rate mortgage and those nearing the end of a fixed rate deal assess their options and consider tying themselves into an affordable fixed mortgage product.
Some homeowners may benefit from comparing a multitude of deals before remortgaging their properties.
Although rates are increasing, they’re still relatively low when compared to historical rates. For example, in July 2007, the Bank of England’s base rate stood at 5.75% and in 2000 it was at a high of 6%.
