Moneyfacts UK Mortgage Trends Treasury Report data, not yet published, highlights that the average two-year tracker rate has increased by 0.07% in just one month, bringing the figures back to July 2016’s level and cancelling out the “base rate effect”.

Charlotte Nelson, Finance Expert at Moneyfacts, said:

“After the average two-year variable rate reached an historic low in September following the Bank of England’s cut to base rate, a logical assumption would have been for the market to stabilise at this new low. Instead, it has increased back to the level it stood at shortly after the EU referendum. This increase has effectively offset any reductions that may have occurred after the base rate announcement on 4 August.

“This increase to the average two-year tracker rate reflects the uncertainty in the market. Providers are facing heightened risks as a result of the wider economic issues such as house price stability and a potential increase to the inflation rate, which may affect household expenditure. This has likely made the low level seen in September unsustainable.

“With the fixed rate mortgage market highly competitive and lenders preferring to lock borrowers in for a longer term, there is no wriggle room to increase rates in this area. So, the variable rate market is an easy target for increased rates.

“The current popularity of this type of product remains to be seen, but anyone looking for a mortgage should seek financial advice to ensure they obtain the best deal regardless of type.”

The Moneyfacts UK Mortgage Trends Treasury Report, out later this month, provides an in-depth monthly review of today’s changing mortgage trends, including all the relevant facts on the UK’s residential and buy-to-let markets.

www.moneyfacts.co.uk - The Money Search Engine

Moneyfacts.co.uk is the UK's leading independent provider of personal finance information. For the last 20 years, Moneyfacts' information has been the key driver behind many personal finance decisions, from the Treasury to the high street.

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