Fixed rates at their highest level for six months

With interest rates at their lowest level, it is perhaps easy to forget about the rate we pay on our mortgage.

We all know that the Base Rate is going to increase, and it is an easy stance to take to say....oh, i will look to change to a fixed rate when the rates change.....but that , i am afraid is far too late.

It is reported today in The Telegraph that latest figures suggest the cost of fixed rate deals has risen sharply during the past six months and will continue to do so amid fears that the Bank of England will increase interest rates sooner than expected.

The cost of a typical five year fixed rate deal has reached 5.45 per cent, the highest level since August last year, according to the research by personal finance website Moneyfacts.

The average three year fixed rate mortgage has reached 5.05 per cent, the highest level since September, while a two year fixed rate deal is at 4.49 per cent, the highest level since August.

It follows a 47 per cent increase in swap rates – the rates which lenders use to price their fixed rate mortgages – from 1.35 per cent for the two year swap rate in November to 1.98 per cent today.

It is a sharp turnaround in fortunes for those looking for a fixed rate deal.

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