Mortgage lenders axe 10-year fixed-rate deals denying homeowners the chance to lock in long-term as rising rates wreak havoc in market
Mortgage providers have pulled a swathe of ten-year fixed-rate deals as rising interest rates and high inflation wreak havoc on the housing market.
Lenders have rushed to raise the cost of ten-year mortgages or withdraw them altogether, with more than 10 per cent disappearing from the market since mid-May, according to Moneyfactscompare.
Homeowners and buyers are desperate to lock in deals as rates keep increasing.
Homeowners and buyers are desperate to lock in deals as rates keep increasing
Banks and building societies have pulled hundreds more home loans to reprice them at higher rates, fuelled by fears of further borrowing cost rises. Economists believe the Bank of England will increase the base rate from 4.5 per cent to 5.5 per cent to tame inflation.
David Hollingworth, of mortgage broker L&C, said: ‘There’s a lot of uncertainty in the market and it’s moving so quickly.’
The average ten-year mortgage deal is now 5.37 per cent, up from 5.08 per cent on May 24.
But in February, High Street banks First Direct, HSBC and Lloyds were offering decade-long deals below 4 per cent.
David Hollingworth, of mortgage broker L&C, said: ‘There’s a lot of uncertainty in the market and it’s moving so quickly’
Dominik Lipnicki, broker at Your Mortgage Decisions, said: ‘Some lenders have removed ten-year deals temporarily, which shows lenders think rates are going to continue to go up.’
Leeds Building Society, HSBC and Co-operative Bank are among those to pull their ten-year fixes in the past fortnight.
Fears of a house price crash have intensified, with some brokers warning that values could fall by as much as 20 per cent over the next two years.
Graham Cox, a mortgage broker at Self-Employed Mortgage Hub, said: ‘A house price crash is inevitable, in my opinion.’