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7 Jul 2020


Fixed rates continue to increase as lenders fail to pass on the cut in swap rates

Darren Cook, mortgage expert at Moneyfacts.co.uk, comments:

“It is now three weeks since the peak in swap rates and we would expect to see the cost of fixed rate deals starting to fall, but this isn’t the case. In fact the opposite is true, with rates continuing to rise.

“Borrowers hoping to fix their mortgage repayments for three years are being hardest hit, with the average rate now standing at a staggering 7.25%. Two year fixed rate deals have also not being immune, with the average increasing to 7.07%.



Average rate

Peak in swap rates

2 year fixed


6.52% (16.06.2008)

3 year fixed


6.47% (19.06.2008)

5 year fixed


6.28% (19.06.2008)

Source: Moneyfacts.co.uk - 7.07.08


“Some lenders, including Abbey and Cheltenham & Gloucester have recently announced cuts in their fixed rate deals. However, Halifax has increased rates by up to 0.20%, while NatWest and Royal Bank of Scotland have increased rates by up to 0.40%.

“It is an extremely worrying time for anyone coming to the end of a fixed rate deal. Borrowers coming to the end of a three year fixed rate deal, looking to fix for another three years could see a £158.23 increase in their monthly repayments (on a £150K mortgage), equating to an additional £5,896.28 in true cost over the three years.



Best buy 3 year fixed

Monthly repayment

True Cost over 3 years

July 2005

4.58% (£399 fee)



July 2008

6.35% (£599 fee)



Source: Moneyfacts.co.uk - 7.07.08


“Our two, three and five year fixed rate best buys are now entirely dominated by deals over 6%. This time last year, deals over 6% didn’t even make the best buys. There are still a handful of sub 6% deals, but these come with such high fees that any benefit from having the slightly lower rate is likely to be wiped out by the fee.

“There doesn’t appear to be any let up in the misery for borrowers. Lenders need to start playing the game fairly and pass on the cut in swap rates as quickly as they pass on the increase.”



Moneyfacts Group
Moneyfacts is the UK’s leading independent provider of personal financial information and our data is used and trusted throughout the financial industry. 



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