Good News? Mortgage rates on two-year fixes have fallen back from highs seen in May, analysis has shown
Rates stand at a typical 2.51%, after last month hitting 2.52% which was the highest level since 2016, according to Moneyfacts data. Mortgage costs appear to have cooled after the Bank of England held off raising interest rates in May. Leeds Building Society, Platform and HSBC are among lenders that cut top-line costs in recent weeks.
Rates had been gradually rising since last year when the average two-year rate was just 2.26%.
Despite dipping this month, mortgage costs could again rise after monetary policymakers appeared to signal the base rate could move up to 0.75% in August.
Three of the Bank’s Monetary Policy Committee (MPC) members called for a rise at this week’s meeting, with chief economist Andy Haldane voting for a rise for the first time.
Ruth Gregory, senior UK Economist at Capital Economics, said: “While the Monetary Policy Committee (MPC) stopped short of explicitly committing to a rate hike in August, the hawkish tone of June’s minutes and statement suggest that it is pretty likely.”
Economic data over the coming weeks is set to be key in the MPC’s decision over whether to make a move.