Two and five-year fixed-rate mortgages in UK at highest level for seven months

theguardian.com:

The average price of two- and five-year fixed-rate mortgages in the UK has hit its highest level for seven months, putting further pressure on borrowers who are reaching the end of their deals.

Data from the financial information firm Moneyfacts showed the cost of a two-year deal for homeowners rising to 6.23% on Monday, up from 6.19% at the end of last week and its highest since last November. Meanwhile, the average cost of a five-year deal rose to 5.86%, from 5.83% on Friday.

The rises mean repayments on a £150,000 mortgage taken at the average two-year rate are now £987.65 a month, compared with £660.90 on the average rate of 2.34% available in December 2021, before the Bank of England began to increase borrowing costs.

The figures came as one of the UK’s largest mortgage lenders, Santander, told brokers it was withdrawing its fixed-rate mortgages tonight and would be replacing them tomorrow with loans at a higher rate.

On Thursday the Bank of England increased interest rates by half a point to 5%, in an attempt to curb inflation.

Many variable-rate mortgage customers faced automatic price rises as their deals are typically linked to the base rate. Fixed-rate customers coming to the end of their deals are also feeling the pinch as the latest crop of deals are all substantially more expensive than those on offer two years ago.

Lenders have been pulling deals from the market and repricing them upwards for several weeks, and Santander, one of the biggest players, has become the latest to announce changes, telling brokers that rates will be going up by “between 0.05% and 0.25%”.

At the same time as increasing its rates for remortgagers and homebuyers, it is also set to drop its cheapest deals, aimed at those with a deposit of