Double whammy for borrowers

Average mortgage rates are certainly on the rise, MoneySupermarket has found

Its research indicates that the average rate for two-year fixes hit a low in October 2011 falling to 3.82% – the lowest figure since April 2009 – but has now risen back up to 4.15%. This means a difference of £27.31 per month or £327.72 over the year for repayments based on a £150,000 mortgage.

Meanwhile, five year fixed rates hit a low in January this year with an average rate of 4.57% but this has crept up to 4.72% adding an extra £12.81 per month or £153.72 over the course of a year. For two-year trackers, the average rate was at its lowest in August 2011 at 3.37% but now stands at 3.63%, hitting consumers with an extra £20.91 per month payment or £250.92 over the year.

There have also been a number of SVR rises announced by lenders recently which come into effect in May. Approximately one million customers will be affected by these increases announced by providers including Halifax, Co-operative Bank, Bank of Ireland and RBS/NatWest. Overall, the average increase to SVRs is 0.62% which will add an extra £52.58 to a £150,000 mortgage or £630.96 over the year.

Clare Francis, mortgage spokesperson at MoneySupermarket.com, said: “Mortgage rates are nudging upwards so anyone looking for a mortgage or whose mortgage deal will end in the next few months should act sooner rather than later to secure one of the current rates in case they rise further.