Average mortgage rates rise
The average two-year fixed rate has risen to 4.15% up from 3.82% in October 2011.
The increase means a difference of £327.72 per year for repayments based on a £150,000 mortgage.
Similarly five-year fixed rates hit a low in January with an average rate of 4.57% but this has crept up to 4.72% adding an extra £153.72 over the course of a year.
The average rate for two-year trackers now stands at 3.63% up from its lowest level in August 2011 at 3.37%, hitting borrowers with an extra £250.92 over the year.
Coupled with the recent standard variable rate hikes by lenders which come into effect in May, comparison site Moneysupermarket urged borrowers to check their mortgage arrangements.
It estimated that approximately one million customers would be affected by the increases announced by providers.
Clare Francis, mortgage spokeswoman 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.
“Borrowers paying their lender’s SVR should also reassess their mortgage arrangements. One of the consequences of the low base rate has been the fact that SVRs have been similar to the rates on new mortgage deals and in some cases the SVR has been even lower.
“As a result an increasing number of people have opted to stick with their existing lender and move onto the SVR when their fixed or introductory tracker or discounted period ended, as opposed to remortgaging elsewhere.
“However as around one million borrowers are about to find out next month, many SVRs can rise even if base rate doesn’t.”
RBS, Halifax, Co-operative Bank, Yorkshire and Clydesdale Banks, and Bank of Ireland will all have SVR rises which will come into effect in May.
The average SVR rise for these banks will be 0.62%.
Francis added: “Economists are expecting base rate to remain at 0.5 per cent for the foreseeable future. A lot of people may therefore be happy to opt for a variable rate mortgage.
“Tracker mortgages are directly linked to base rate so any changes directly mirror moves in the Bank of England base rate. This is different to discounts which are linked to the lender’s SVR, so given the forthcoming SVR increases; a tracker is a safer option.
“If the prospect of higher mortgage repayments worries you, a fixed rate deal will give you peace of mind and protect you from interest rate increases for a set period of time.”