Fixed Mortgage Rates Nudge Higher

(Reuters) – THE COST OF TAKING OUT A NEW FIXED-RATE MORTGAGE rose to its highest level this year in July, extending a jump of around half a percentage point in June, figures from the Bank of England showed today.

The rise partly reflects a shift in longer-term interest rate expectations; but it also casts doubt over banks’ willingness to take on new lending and the potential for a housing market recovery.

The average rate on a five-year 75% loan-to-value mortgage rose by 16 basis points to 5.7%, its highest level since October.

The average rate on a similar product fixed for two years rose by one basis point to 4.46%, its highest level since December, having jumped by 47 basis points in the previous month.

Two and five-year swap rates, which provide the benchmark for much mortgage lending, have risen over the past few months as a raft of economic data has suggested Britain’s economy is emerging from recession.

The average standard variable rate was unchanged at 3.95% last month, remaining low by historical standards.

… (25/08/2009) – July Mortgage Approvals At 17 Month High

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