Last week we reported that lenders had started to increase their mortgage rates, and this week we've got further confirmation that the end of record low mortgage rates could be upon us, with data from the latest Moneyfacts UK Mortgage Trends Treasury Report showing that, as SWAP rates have seen a steep rise due to base rate speculation, the average two-year fixed mortgage rate is also starting to edge up.
The figures from the report, due to be published later this week, show that the average two-year fixed mortgage rate has fallen by 0.02% from September to stand at 2.20% this month, another record low. However, this month-on-month fall doesn't quite tell the whole story, as additional figures show that the average has now increased by 0.04% from 1 October, and there's no indication of a reversal.
The graph below goes some way to explaining the recent uptick, and it's all down to SWAP rates. The SWAP rate is the interest rate charged between banks for lending to each other, with this wholesale cost often having an impact on the mortgage rates charged to borrowers. As you can see, SWAP rates have jumped up in recent weeks, and this is starting to filter through into mortgage rates.