UK mortgage rates stabilise after weeks of costly rises
Newsflash: UK fixed-rate mortgage costs have stabilised today, having risen steadily in recent weeks.
Financial data provider Moneyfacts reports that the average 2-year fixed residential mortgage rate today is 6.78%, matching the rate recorded on Friday.
The average 5-year fixed residential mortgage rate has also remained flat at 6.30%.
This is the first time in almost two months that the average fixed mortgage rates haven’t gone up, Moneyfacts tell us.
The last time the average rate didn’t go up between two working days was on the 24th and 25th May – when the average two-year mortage was 5.34% while five-year fixed rates cost 5.01% on average.
The rates on both two and five-year fixed-rate mortgages have been rising pretty steadily since the end of May, when concerns over future interest rate rises began to grow.
In recent days, though, market expectations for rate rises have eased. The money markets currently predict Bank of England base rate could peak around 6.25% early next year, down from an earlier forecast of 6.5%.
But rising interest rates have already cooled the market, with Rightmove reporting a small drop in asking prices last month.
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UK fixed mortgage rates have stabilised today, after many weeks of steady rises. Both two-year and five-year mortgage rates were unchanged today, for the first time since late May.
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Surging interest rates have driven the biggest fall in British households’ aggregate wealth in the postwar era, according to a report which shows aggregate wealth of British households has dropped by £2.1tn in cash terms.
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But, the Resolution Foundation also reported that younger people could be net winners from higher rates, as it will lower house prices and make it easier to build up a pension.
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How are different generations affected by a world of higher rates and lower wealth?
Boomers – largely insulated as their own outright.
Millennials – lots more debt if they're in early years of home ownership.
Zoomers – benefit from lower house prices and pension saving easier. pic.twitter.com/VMemm3pnvR
— Resolution Foundation (@resfoundation) July 17, 2023
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And you can read the report we launched today – Peaked Interest? What higher interest rates mean for the size and distribution of UK household wealth by @ianmulheirn @mollybroome_ & @simonpittaway here https://t.co/XXvmZjC1ha
Thanks to partners on this project @finan_fairness— Resolution Foundation (@resfoundation) July 17, 2023
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Russia has formally withdrawn from the deal to export Ukrainian grain across the Black Sea, sparking criticism from the White House. Wheat prices jumped, amid concens that tens of millions of tonnes of food exports could be threatened.
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Rishi Sunak has admitted that inflation is not falling as quickly as he would like…
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…while US Treasury secretary Janet Yellen has said she does not expect the US to fall into recession.
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Here are the rest of today’s main stories:
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