First-time buyers hit again as mortgage rates rise
First-time buyers hit again as mortgage rates rise
Rising mortgage rates erase over 200 low-deposit deals, signaling tougher days ahead for new buyers in the UK housing market.
Mortgage rate rises are continuing, 'thick and fast', with borrowers told to brace for more volatility in the coming days and weeks. Lenders are still lifting rates or pulling deals, leaving many first-time buyers scrambling to lock in a rate before it vanishes. The pullback has been sharp: more than 200 deals with low deposits have disappeared since 6 March, and Saturday saw the largest daily withdrawal since the mini-Budget in 2022.
The average two-year fixed mortgage now sits at 5.51%, up from 4.83% at the start of March. For someone borrowing £250,000 over 25 years with only a 5% deposit, those higher rates could mean about £1,200 extra a year compared with the situation at the start of March.
Analysts say there is likely more upheaval to come as the market adjusts to a disrupted gilt market and the broader geopolitical tensions. With such volatility, borrowers are urged to seek independent advice to understand their options and to move quickly if rates are about to expire.
Before the recent tremors, many borrowers had hoped for rate cuts later in the year. Those expectations have been upended by the latest market moves, and lenders are repricing faster than at any time since the mini-Budget of 2022.
Moneyfacts warns that the squeeze on low-deposit deals will persist, underscoring the reality that getting on the property ladder has become more expensive and more complex. For first-time buyers, staying informed and shopping around with professional help remains essential as the market tests wallets and nerves.
