Recent rises in swap rates may force lenders to increase the cost of their fixed rate contractor mortgages over the coming days.
Swap rates rose yesterday with two and three-year swaps up by over 0.2% and five years up by 0.14%. Since 14 May, the day after the publication of the Bank of England’s Quarterly Inflation Report, three and five-year swap rates have surged by 0.62%.
Potential borrowers are moving in quickly to secure current “fixed deals” as they don’t want to miss out on the current low rates.
However, there is still comfort for those borrowers looking for a tracker rate as lenders had no reason to increase contractor mortgage tracker rates yet. But beware, lenders with particularly competitive tracker rates may still increase them if they want to reduce the volume of applications they receive.
