Rock bottom mortgages are ‘long gone’ experts warn, as 5% rates become the new normal

Homeowners will have to accept that 5% mortgage rates have become the new normal and that the days of rock-bottom rates are 'long gone' experts warn gracegausden93 reports

David Hollingworth of London & Country Mortgages added: “We’ve got to get away from this idea of 1 to 2 per cent mortgage rates being the norm. It isn’t. We were more comfortable when the best deals were under 4 per cent but now it is averaging out at 4 to 5 per cent as the normal.The impact is like that of a ‘credit crunch’ for smaller lenders, many of which who have withdrawn and then reintroduced rates at a higher level.

Some 1.5 million fixed-rate mortgages are due to come to an end of their term this year, of which 800,000 will end in the second half of the year, UK Finance said. Overall, 3.4 million will see their fixed deal finish by the end of next year causing some people to see their mortgage bill go up by hundreds of pounds a month as home owners experience an abrupt weaning off rock-bottom interest rates.

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