Cheap mortgage deals vanishing fast

Homebuyers are racing to lock in a cheap mortgage deal, the Sunday Times reports, as lenders are regularly increasing mortgage rates and pulling products from the market within 24 hours of launch. Mortgage providers are having to cope with a backlog of applications as buyers and owners try to secure a deal before interest rates and house prices rise further. The Bank of England has increased the base rate six times, from 0.1% in December to 1.75% today, and this has fed through to mortgage rates. A further rise of 0.75 percentage points is expected when the Bank's committee meets again this month. The average two-year fixed rate is now 4.24%, up from 2.86% six months ago, according to Moneyfacts. This race for new deals is also fuelling the product rate rises. Many lenders have already hit their loan targets for the year and so have been quick to take deals off the market when they become overwhelmed by demand. Some have had to pause new applications because they cannot process them fast enough. To avoid this, many are putting up rates so that they do not compete with the best buys for a while. 

The Sunday Times (11/09/2022)