Fixed-rate mortgages costs rise to their highest level in a decade

Posted under General by Alan

The cost of fixed-rate mortgages rose to their highest level almost in a decade as banks were compelled to pass on sharp rise in the borrowing costs. Britain’s second-largest mortgage lender Nationwide has increased the cost of several of its mortgages by at least up to half a percentage point. This move follows several other increases from many leading UK banks last week.

The developments have led Moneyfacts, the financial data compiler, to announce that the average two year fixed rate mortgage now stand at 6.75 per cent, the most expensive level in a decade. Darren Cook, a mortgage expert there, remarked that the curse of Friday 13 brought more pain for borrowers. Swap rates scaled a new high of 6.49 per cent.

The situation is likely to worsen before it gets better, with lenders having to pay an exorbitant price to secure funds compounded with a lag time of at least a few weeks before this cost gets passed on to mortgage seekers.

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