Fixed-rate mortgages rising

By Joel Stanier – Financial specialist

Various major mortgage lenders are planning to increase the cost of their fixed-rate mortgages - especially the longer-term deals - The Financial Times reports.

The cost of certain sources of funding (medium- and long-term swap rates) has risen recently, prompting lenders to follow suit with their own rates.

One building society is apparently increasing the rates on its five-year deals by up to 0.3 percentage points, while another is planning to `increase sharply` its five- and ten-year mortgage deals.

Long-term mortgage deals are not, however, the only ones expected to rise. Some two-year deals from a major provider are due to rise by anywhere between 0.1% and 0.7%.

Soon, the best five-year fixed-rate mortgages could come with an APR of between 4.5% and 4.75%.

"This marks a distinct shift in the benchmark products,” said David Hollingworth at London & Country Mortgages, "when you consider that five-year rates had dipped slightly below 4 per cent at the end of February."

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Tags: mortgage, mortgage rates, swap rates, London and Country Mortgages, mortgage interest rates, fixed rate, fixed rate mortgage, fixed mortgage rates, mortgage deals, long term mortgage deals

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