25 Jun

Cost of two-year fixed-rate mortgage hits 7.02%

Cost of two-year fixed-rate mortgage hits 7.02%

The average rate for a two-year fixed-rate mortgage has now risen above the seven per cent barrier, according to Moneyfacts.

It reports that the typical rate borrowers can expect to pay for such a mortgage stands at 7.02 per cent, while the average rate for a five-year fix is 6.82 per cent.

The firm suggested the rise in the cost of two-year mortgages is because the swap rate on this product on the money markets reached 6.52 per cent last week.

"Any increased cost to lenders in arranging the funds on the money market is passed on to customers," it said in a statement.

Although Moneyfacts acknowledged that this may be a worrying time for anyone coming to the end of a fixed-rate deal, it also noted that the swap rates have already fallen by 0.16 per cent.

The company reported earlier this month that mortgage costs are at their highest level in a decade.

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