Fixed rate mortgage costs have risen

Fixed rate mortgage costs have risen over the last month with most increases being seen on low deposit fixed rate mortgages.

According to information from Moneyfacts, over the last month the cost of the average fixed rate mortgage has risen.

It seems mortgage lenders are seeking to take bigger margins, particularly on their shorter term fixed mortgage deals.

This is because even though the 2 year swap rates have continued to fall, the mortgage lenders have not passed these on in their mortgage rates.

Many mortgage providers have increased their rates over the last month, including the Halifax and the Woolwich banks and building societies, including Britannia, Coventry, Principality and Yorkshire Building Society.

Longer term swap rates have increased and this is being passed on with higher rates being set for longer term fixed rate mortgages.

The average 10 year fixed rate mortgage is now at 5.78%, up 0.04% on the previous month.

Those borrowers with small deposits are being hardest hit, particularly those with no more than a 15% deposit. Rates on these mortgages on a 10 year fixed basis have risen 0.2% over the last month.

Moneyfacts analyst Michelle Slade commented ‘Borrowers hoping to take advantage of this period of low interest rates and lock into a long term fixed are going to be disappointed.’

She added ‘The best deals aer still to be found for borrowers with a 40% deposit, but even these have not been immune from the increase in rates.’