Hundreds more home loan deals have been pulled by banks and building societies since the end of last week while rates on new fixed mortgage deals are continuing to ratchet upwards, the latest data reveals.
The continuing turmoil in the mortgage market is also prompting record numbers of people to take out loans of more than 35 years in an attempt to make their monthly payments more affordable.
On Monday the average rate on a new two-year fixed mortgage stood at 5.72%, according to figures from the financial data provider Moneyfacts, compared with 5.26% at the start of May.
That difference means someone taking out such a deal now faces paying £648 more a year than someone who signed up to the equivalent just over a month ago, based on a typical £200,000 mortgage.
The extra payment soars to more than £3,600 a year when compared with someone who took out a typical two-year fix priced at just over 3% in May last year.
UK banks and building societies have been pulling swathes of mortgage deals from their books in the wake of a smaller-than-expected drop in the UK inflation rate to 8.7%, which led markets to bet that the Bank of England would raise interest rates well above 5% by the end of the year.
The number of residential mortgage deals available on 22 May – two days before the inflation data was released – stood at 5,385. That had fallen to 4,967 by Thursday last week and was down to 4,686 on Monday.
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Source: www.theguardian.com
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