Expect fixed rates to continue to rise - MoneyFacts

Published ¤ 22/06/2009

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Moneyfacts has reported that last week the average five year fixed rates rose by 0.21% from 5.61% to 5.82%.

Two year fixed rates also rose 0.16%, whilst the number of fixed rates on offer dropped by more than 5%.
Michelle Slade from Moneyfacts said "After a period of relative calm in the mortgage market, lenders are stumbling over each other to increase fixed rate mortgages. The last time we saw such frantic activity was at the end of June 2008, when the average two year fixed reached a staggering 7.08%.
"The recent increase can be attributed to the hike in swap rates that we saw a few weeks ago. Just like last time, lenders are quick to pass any increase in the cost of wholesale funding on, but are never quite as quick to reduce rates when the cost of funding declines.
"In June 08, when the average rate hit its peak the margin over swaps was 0.76%. Today the margin is 2.35% and it is hard to forsee anything other than fixed rates increasing even further."
As we have been reporting at PKS for some weeks, if you want to secure a decent fixed rate, you will need to move quickly. It may soon be too late.
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