Two-year fixed rates top 7%

The average interest level on a fixed-rate mortgage deal is now as high as seven per cent, according to the latest figures.

Data from Moneyfacts have shown that lenders are tending to offer fixed-rate mortgage deals that are less favourable for borrowers than has been the case at any point in the past decade.

As a result, many homeowners are likely to find themselves in an increasingly difficult
debt management position when they come to the end of one mortgage deal and look to find another.

“This increase is a result of the two-year swap rate reaching 6.52 per cent last week,” explained Darren Cook, mortgage expert at Moneyfacts.

“Any increased cost to lenders in arranging the funds on the money market is passed on to customers.”

The Council of Mortgage Lenders suggested recently that so many homeowners are struggling to become debt free that the mortgage market is likely to remain “very weak” over the next few months.

By Giles Stevenson