Homebuyers with insufficient funds for a down payment must contend with mortgage rates that exceed 6 percent.
The average interest rates on home loans have risen to levels not seen since the beginning of the year, according to new data, as lenders respond to increased market turmoil.
Those who seek a two-year fixed-rate mortgage but have only saved a 5% down payment can expect to pay an average rate of 6.01 percent.
Regardless of the size of the deposit, the average rate for a two-year loan is above 5 percent. Many are scrambling to secure agreements before rates increase once more.
In both instances, conditions have improved since January, when the market was still recovering from Kwasi Kwarteng’s mini-Budget for the autumn.
After the release of inflation figures that were worse than anticipated last month, market volatility has once again increased.
Traders anticipate that the Bank of England’s base rate will rise to 5.5% by the end of the year.
This impacts the interest rates used by lenders to price mortgages, resulting in rate increases for these loans.
According to data compiled by the real estate website Rightmove, home loan rates increased by an average of 0.39 percent over the past week.
Rightmove’s Matt Smith stated, “This is a much larger increase than we’ve seen in recent weeks, reflecting the current uncertainty among lenders.”
