News: UK Mortgage Rates Rise to Highest Level in 6 Months

Fri, 11 Mar 11

Talk of a hike in interest rates pushed up the cost of UK mortgages rise during February, new figures have revealed.

The average cost of a five-year fixed rate mortgage jumped to 5.17% in February, compared to 5.03% in the previous month. It was the highest level of interest charged on such a deal since July 2010 and the third month in a row that rates have increased, according to the Bank of England.

Interest charged on a two-year fixed rate deal for people with a 25% deposit also edged up during the month. It reached 3.72%, which was the same rate charged in September last year.

Lenders are increasing the cost of mortgages while high inflation fuels speculation that the Bank of England will raise interest rates earlier than previously expected. The rates charged on two-year tracker mortgages for someone borrowing 75% of their home’s value also increased to a five-month high, rising to 3.54% from 3.51%.

See also: Mortgages

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