Average 2-year fix jumps 17bps in a month: Moneyfacts – Mortgage Strategy

Average fixed rates showed little movement over the past week, but the two-year rate is now 17 basis points higher than last month at 5.63%.

The latest rate watch figures from Moneyfacts show the average two-year fixed rate remained flat week on week at 5.63%, as some major lenders cut prices and others increased costs.

The average five-year fix rose 1 basis point to 5.67% and the average three-year fix dipped 2bps to 5.38%.

Compared to a month ago, averages are higher across all three fixed rate categories.

The two-year average has risen 17bps from 5.46%, the three-year rate by 21bps from 5.17% and the five-year rate by 19bps from 5.48%.

Moneyfacts finance expert Rachel Springall says: “The start of August began with higher mortgage rates for borrowers, with lenders making fixed rate increases outweighing those making cuts.

“Over the past couple of weeks, swap rates, which underpin fixed mortgages, have fallen away from their 30-day highs, and as a result, a couple of lenders decided to cut selected rates this week.

“However, the market would need to see a bigger scale of cuts to start pushing mortgage costs back down significantly, and that’s highly unlikely with ongoing tensions in the Middle East.

“More than five million UK homeowners are now expected to face higher mortgage repayments by the end of 2028, according to the latest Financial Stability Report from the Bank of England.”

This week’s changes:

Fixed rate reductions

• AIB (NI) – Fixed rate mortgages reduced by up to 55bps.
• Barclays Mortgage – Selected fixed rate mortgages reduced by up to 50bps.
• Coventry Building Society – Selected fixed rate mortgages reduced by up to 15bps.
• Gen H – Selected fixed rate mortgages reduced by up to 40bps.
• Nationwide Building Society – Selected fixed rates reduced by up to 19bps.
• Newcastle Building Society – Self Employed fixed rate reduced by 20bps.
• Suffolk Building Society – Selected fixed rate mortgages reduced by up to 19bps.
• Virgin Money – Selected fixed rate mortgages reduced by up to 8bps.

Fixed rate increases

• first direct – Selected fixed rate mortgages increased by up to 32bps.
• Furness Building Society – Selected fixed rate mortgages increased by up to 31bps; Own New rates increased by up to 56bps.
• Halifax – Selected fixed rate mortgages increased by up to 12bps.
• Kensington – Selected fixed rate mortgages increased by up to 40bps.
• Leek Building Society – Selected fixed rate mortgages increased by up to 7bps.
• Lloyds Bank – Selected fixed rate mortgages increased by up to 12bps.
• Melton Building Society – Selected fixed rate mortgages increased by 10bps.
• Pepper Money – Selected fixed rate mortgages increased by up to 35bps.
• Progressive Building Society – Fixed rate mortgages increased by up to 25bps.
• Saffron Building Society – Selected fixed rate mortgages increased by 20bps.
• Tipton & Coseley Building Society – RIO and Lending into Retirement fixed rates increased by up to 20bps.
• West Brom Building Society – Selected fixed rate mortgages increased by up to 13bps.

Product launches, withdrawals and other changes

• Barclays Mortgage – New Great Escape fixed rate launched at 4.88% to 30.9.29.
• Coventry Building Society – New fixed rates for first-time buyers launched, while selected rates are now available to second-time buyers only.
• Hinckley & Rugby Building Society – New Credit Renew discounted variable and fixed rate mortgages launched. Skilled Worker Visa fixed rate end date extended by one month.
• Leeds Building Society – New fixed rate mortgages launched from 4.78%.
• Melton Building Society – New discounted variable rate and fixed rate mortgages launched.
• Newcastle Building Society – Interest Only fixed rate mortgages withdrawn and not replaced. New fixed rates launched from 4.99%. Affordability Boost fixed rate end date extended by one month.
• Skipton Building Society – Interest Only repayment method made available to first-time buyers, subject to standard criteria.
• Suffolk Building Society – Product end dates extended by two months.
• Tipton & Coseley Building Society – Selected fixed rates withdrawn.

  Product end dates extended by two months.

• West Brom Building Society – New house purchase fixed rates launched from 4.86%.
• AIB (NI) – Product end dates extended by one month.
• Leek Building Society – Product end dates extended across the range by three months.
• Kensington – Core Special and Select Special products with a 1% of advance fee withdrawn.

Tracker and discounted variable rate changes

• Hinckley & Rugby Building Society – New Credit Renew discounted variable rate mortgage launched at 5.94% for two years.
• Melton Building Society – New discounted variable rate mortgage launched at 5.05% for two years.
• Progressive Building Society – Discounted variable rate mortgages increased by up to 25bps.