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TODAY'S OTHER NEWS

Rightmove warns lenders may start increasing mortgage rates

Further mortgage rate rises could be on the way for homebuyers and owners, Rightmove suggests.

After a few weeks where mortgage rates have dropped – boosting hopes among buyers of getting on the property ladder more cheaply - the portal’s mortgage expert Matt Smith said there are signs that lenders are facing price pressures particularly ahead of the latest Bank of England interest rate decision due next month.

Smith said average rates for mortgage products continued to fall this week across most loan-to-value (LTV) ranges, albeit at a much slower rate.

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Competition between lenders remains strongest in the traditional first-time-buyer LTV ranges, he suggested.

The largest fall is in the 90% LTV 2-year fixed rate product range, which has dropped by 0o.4% this week to 5.04%, still higher than the 2.71% that borrowers could have got last year.

Smith added: “There are signs that lenders are facing increasing pricing pressures, as we have seen an increase in 95% LTV five-year fixed rates.

“This is in part due to the relatively small number of lenders active in this space, which means that the average can be influenced by one or two lenders increasing rates.

“Looking forward, it is likely that we will see lenders continue to try to hold the line on rates as competition remains the focus while they await the next base rate decision on 11 May.

Despite this, we could see some rate increases in the meantime.”

LTV (loan to value)

 

Term

 

Average rate

18th April 2023

Average rate

25th April 2023

Weekly Change

Average rate

a year ago

95%

2 year fixed

5.48%

5.48%

0.00%

3.15%

95%

5 year fixed

5.04%

5.10%

+0.06%

3.44%

90%

2 year fixed

5.08%

5.04%

-0.04%

2.71%

90%

5 year fixed

4.69%

4.67%

-0.02%

2.91%

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