Mortgage rates have risen to their highest point in nearly five months, with the average two-year fixed rate now at 5.67% and the five-year fixed rate at 5.72%. This follows approximately 25 lenders, including HSBC, Lloyds, and Nationwide, increasing their deals in the past week.
Adam French, head of consumer finance at Moneyfacts, stated that mortgage rates have recently caught up with earlier increases in swap rates. He added that lenders will now face further pressure to reprice, and borrowers should be prepared for additional mortgage rate increases in the coming weeks unless swap rates fall significantly.
The Bank of England's Monetary Policy Committee is scheduled to meet on Thursday. While rates are expected to remain unchanged at 3.75%, economists are beginning to price in a potential hike in November due to renewed inflationary pressures.
UK mortgage approvals decreased to 56,100 in July from 58,200 in June. Net borrowing also fell from £7.7bn to £4.3bn.