Is now the time to secure a new fixed-rate mortgage deal?

Mortgage interest rates hit record lows in July in the wake of the lockdown and subsequent announcement of a stamp duty holiday.

Unsurprisingly, activity surged. The number of offers accepted in UK markets between 8 July - when the SDLT holiday was introduced - and 3 August, was 146% above the five-year average for properties valued at less than £1.5 million, the section of the market where the impact of the holiday would be felt most. Above that figure, the increase was 71%.

There are now signs that mortgage rates are beginning to creep up from record lows. Average rates for both the two and five-year fixed rates across all loan-to-value ratios (LTV) have increased by 0.09% since the beginning of July, and now stand at 2.08% and 2.34% respectively, according to Moneyfacts.

Rates are still very low, and remain below levels seen in late 2019, but it’s possible they will continue to rise with so much economic uncertainty on the horizon. With that in mind it’s worth considering whether now is the right time to lock in a new fixed rate mortgage deal.

By way of example, this week it’s been possible to secure a 2 year fixed rate of 1.14% on a £750,000 home purchased at 75% LTV. Or a 5 year fixed rate of 1.58% on the same property.

If you’d like to discuss your mortgage, or would like to have an informal conversation to assess your finances, do get in touch.