Customers looking to fix their mortgage for five years are also paying the price as the average rate has increased to 6.72%.
Darren Cook, mortgage expert at Moneyfacts.co.uk, comments: “The curse of Friday 13th brought more pain for borrowers as swap rates reached a new high of 6.49%. With lenders having to pay such a huge price to secure funds and a lag time of a few weeks before this cost is passed on to mortgage customers, the situation is likely to get worse before it gets better.
“Many borrowers prefer fixed rate deals, particularly in today’s economic climate as they struggle to keep outgoings under control. However, many are likely to find this increased cost too much to bear. With the average two year variable rate standing at 6.66%, many are finding they have little choice.
“If the current economic climate persists, it is not unreasonable to predict that we may see a situation where a higher proportion of borrowers are on their lender’s SVR, rather than on an actual mortgage deal.”
