Under 4%-deals are off the market as interest rate cut hopes were crushed after a bigger-than-expected rise in inflation to a six-month high.
The average two-year fixed mortgage rate is 5.09%, unchanged from last week, while a five-year deal has an average rate of 4.89%, higher than the previous 4.74%, according to figures from Uswitch.
Five of the UK's largest mortgage lenders hiked their rates on fixed-rate mortgages last week: Santander, TSB, HSBC, Virgin Money, and Nationwide Building Society. However, there were no major changes this week in rates.
"Although the rate lifting above target is not a shock, at 2.3% it is a little higher than many had expected," David Hollingworth, associate director at L&C Mortgages, said.
"That will pour more cold water on the prospects for another cut to base rate to come next month, which will be disappointing news for those on a variable or tracker rate mortgage."
He added that fixed rates have "already been on the move and have climbed in recent weeks", often by 0.25 percentage points or more.
As a result, "borrowers will need to remain on their toes, as mortgage deals are still in something of a state of flux and lenders are repricing regularly", David said.
"There certainly isn't the luxury of being able to hold off from committing to a deal and expecting it to still be there in a week or so, as rates continue to come and go quickly.
"It would be of little surprise if that trend continues and fixed rates are pushed higher on the back of today's news."
Rachael Hunnisett, April Mortgages director, said: Mortgage rates have been creeping up since the budget and may be further impacted as a result of [Wednesday’s] announcement, which is higher than most market expectations. These recent rate changes are a sign of how quickly the mortgage market can reverse course.
HSBC mortgage rates
HSBC (HSBA.L) has a 4.15% rate for a five-year deal. This is unchanged from the previous week and for those that have a Premier Standard account with the lender this rate comes in at 4.12%.
Looking at the two-year options, the lowest rate comes in at 4.32% with a £999 fee, which is also unchanged
Both cases assume a 60% LTV mortgage, meaning buyers need to have at least 40% for a deposit.
HSBC offers 95% LTV deals, meaning you only need to save for a 5% deposit. The rates are much higher, however, with a two-year fix coming in at 5.85% or 5.36% for a five-year fix.
This is because the rate someone can get will be determined by their financial situation and the size of their deposit. The larger the deposit, the lower the LTV, allowing buyers to access better deals because lenders consider them less risky.
NatWest mortgage rates
NatWest (NWG.L) is offering 4.07% for a five-year deal with a £1,495 fee, which is unchanged.
For a two-year fix, the cheapest deal comes in at 4.22%, also the same as before. In both cases, you'll need at least a 40% deposit to qualify for the rates.
Santander mortgage rates
At Santander (BNC.L) a five-year fix comes in at 4.14% with a £999 fee, assuming you have a 40% deposit — again, unchanged from the previous week.
For a two-year deal, the cheapest customers can get is 4.24% with the same £999 fee, which is unchanged.
Barclays mortgage rates
Barclays (BARC.L) has dropped its market leading 3.71% five-year deal for prospective homebuyers with a 40% deposit (60% LTV). The same deal now comes in at 4.28%.
When it comes to two-year mortgage deals, the lowest you can get is 4.33%. Both deals are the same from the previous week.
Nationwide mortgage rates
Nationwide (NBS.L) is offering a five-year fix at 4.19%, which comes with a £999 fee and requires a 40% deposit. Same as the previous deal.
Nationwide offers a two-year fixed rate for home purchase at 4.34% with a £999 fee — also for borrowers with a 40% deposit.
Halifax mortgage rates
Halifax, the UK’s biggest mortgage lender, offers a five-year rate for 4.18% (also 60% LTV), which is unchanged from the previous week.
The lender, owned by Lloyds (LLOY.L) has a two-year fixed rate deal coming in at 4.23%, with a £999 fee for first-time buyers, which is also unchanged.
It also offers a 10-year deal with a mortgage rate of 4.58%.
Cheapest mortgage deal on the market
With mortgages below 4% no longer on the market, prospective homeowners are back to limited choices when it comes to finding a good deal.
NatWest currently has the cheapest deal on the market. However, its 4.07% offer requires a 40% deposit, so you will need a hefty amount of cash upfront to secure the deal. Santander is close behind, with a 4.14% deal for a five-year fix.
Given the average UK house price sits at £292,505, a 40% deposit equates to about £117,000.
Borrowers would need to spread their home loans over more than 70 years to afford the same mortgages on offer two years ago, banks have said.
There is also a new mortgage product promising to help first-time buyers get on the property ladder with just a £5,000 deposit. Yorkshire Building Society is offering a deal that enables first-time buyers across England, Scotland and Wales with a £5,000 deposit to purchase a property valued at up to £500,000.
This means first-time buyers could get on the ladder with as little as a 1% deposit.
Also, lender April Mortgages is offering buyers the chance to borrow up to six times their income on loans fixed for five to 15 years, from a deposit of 5%. Both those buying alone and those buying with others can apply for the mortgage.
The company, which is part of an independent Dutch asset manager DMFCO has interest rates starting at 5.20%, with an application fee of £195.
Skipton Building Society has also said it would allow first-time buyers to borrow up to five-and-a-half times their income, in an effort to support more borrowers on to the housing ladder.
Will mortgage rates go down in 2024?
Mortgage holders and debt borrowers have been forced to pay record-high repayments in recent years due to the UK's hiked base rate being passed onto customers by banks and building societies. Until now, the consensus was that interest rates have peaked and that 2024 will see rate cuts as inflation eases.
MPowered Mortgages' head of product, Peter Stimson, said: “The return of inflationary pressure means the Bank of England is likely to adopt a ‘wait and see’ approach on any further Base Rate reductions, not just in December, but in the immediate months following as well.”
“While this was to a large extent expected, it doesn’t offer any relief to mortgage lenders and is unlikely to allow them to reduce the interest rates they offer to new customers in the run up to Christmas.”
About 1.6 million existing borrowers have relatively cheap fixed-rate deals expiring this year.
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