UK mortgage rates remain high as markets watch oil and bond yields

UK fixed mortgage rates have risen this year even as the Bank of England’s base rate has remained at 3.75%, with rates around 4.7% compared with 3.7% in February. The increase has been driven by higher swap rates linked to oil prices and bond-market volatility.

Sebastian Murphy of a mortgage network said a resolution to conflicts affecting shipping through the Strait of Hormuz could lower oil prices and wholesale funding costs, potentially giving the Bank of England room to cut rates. For now, he said fixed rates are likely to remain elevated, while tracker mortgages are about half a percentage point cheaper and often carry no early repayment charge.

Tracker mortgages accounted for 12% of mortgage choices in April, up from 4.1% a year earlier, according to network analysis cited in the material. Lenders’ funding structures may also produce different pricing responses as market conditions change.

Read the full story at mpamag.com.