"Confidence breeds confidence and a pause in rate rises will mean lenders stabilise their product offerings and the resultant competition drives prices downwards"
This morning, the average rate for a two-year fixed-rate mortgage stood at 6.01%, according to the latest figures from Moneyfacts.
PR platform, Newspage, asked brokers for their thoughts:
Justin Moy, managing director at EHF Mortgages: "The average rate will also factor in those products in the specialist and adverse markets, so will show a slightly worse scenario than the majority of mortgage borrowers will experience. A quick check of Halifax's two-year fixed deals this morning suggests a range of 5.4%-5.5% for most LTV bands if you are looking to remortgage. It is a difficult time though. We all hang on the words and actions of the government and the Bank of England this week. We can only hope that the inflation figures are better than expected and that the Bank of England holds back on any more increases for the moment."
Riz Malik, founder and director at R3 Mortgages: "We urgently needs a cross-party Mortgage Task Force to find potential solutions to this ticking time bomb. This should be comprised of economists, lenders and other stakeholders who are actively involved in the mortgage market. We need action or the impending financial earthquake is going to send shockwaves across the country."
Samuel Mather-Holgate, IFA at Mather and Murray Financial: "The Government need to change the mandate of the Bank of England so that they put more weight on the future of the economy and give their inflation target a longer term time horizon. This would allow them to maintain their independence but take their foot off the accelerator when it comes to rate hikes. Confidence breeds confidence and a pause in rate rises will mean lenders stabilise their product offerings and the resultant competition drives prices downwards."
Gary Bush, financial adviser at MortgageShop.com: "The SONIA swaps rate for two years is currently 5.435%, so it's sadly still clear that UK mortgage lenders are still in overreaction mode. All that financial advisers can do at the moment is feel sorry for applicants trying to get transactions arranged. We simply can't get to Wednesday's inflation figure announcement fast enough."
Jonathan Burridge, founding adviser at We Are Money: "It is irresponsible scaremongering. Average is a terrible word and from my sourcing this morning, two-year fixed-rate mortgages are still available in the low 5s. Aside from their data being questionable, all this sensationalism simply causes panic and instability. We need to keep calm. Rates have returned to 'average' levels if you look at the last 40 years or so. It is going to be painful for many and they need to speak with balanced professionals who can assist rather than be scared to hell by headline-grabbing stories."
Graham Cox, founder at SelfEmployedMortgageHub.com: "Let's just pray the inflation figures on Wednesday are better than expected. If they are, rates may fall as quickly as they've risen over the past couple of weeks. If they're worse, hold onto your hats."
Elliott Culley, director at Switch Mortgage Finance: "The key word here is average. If customers have a good credit score there are two-year fixed rates below 6%. However, this is in stark contrast to just two-three weeks ago when you could get a two-year fixed rate under 5% and we were even talking about when they might break under 4% a few months ago. It shows how quickly the mortgage market is changing, and clients need to be on the ball when it comes to renewing their mortgages."
