Despite the recent peak in swap rates, the cost of fixed-rate mortgage deals continues to rise, having reached the highest interest rates for more than ten years, financial information website Moneyfacts.co.uk says.
Darren Cook, mortgage expert at Moneyfacts.co.uk, commented: "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."
An end is not yet in sight for the misery of thousands of borrowers whose fixed rate mortgage
deals have come to an end and are due for renewal. Those trying to get a three year fixed deal are hardest hit with average interest rates of 7.25 per cent, closely followed by two year fixed deals which have risen to 7.07 per cent.
Although some lenders such as Abbey and Cheltenham & Gloucester recently announced cuts in their fixed-rate deals, others like Halifax, NatWest and Royal Bank of Scotland increased their rates by 0.40 per cent.
"It is an extremely worrying time for anyone coming to the end of a fixed rate deal," Mr Cook continued. "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
Moneyfacts.co.uk's list of best buys for two, three and five year fixed rate deals now includes mainly over 6 per cent deals, which last year did not even make it into the best buys.
The few remaining deals available with interest rates under 6 per cent were hardly worth taking out because of their high arrangement fees, Mr Cook warned, as they would completely wipe out the benefits taken from their slightly lower interest rate.
He concluded: "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."
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