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Average two-year rate ticks up: Moneyfacts

The average two-year rate has ticked up to 2.51 per cent, according to new data from Moneyfacts.

This is the first time that the rate has moved up since 23 November, at which point it was also recorded at 2.51 per cent, having dropped from 2.53 per cent at the start of the month.

In the meantime, the average rate has fallen as low as 2.50 per cent, as seen last Friday, although this is some way off the 52-week low of 2.33, as seen in January this year.

Moneyfacts financial expert Darren Cook says: “Over the last few weeks and months, we’ve seen competition in the 95 per cent LTV area push rates down, but this reduction has stalled.

“What we see this week is that 95 per cent average has gone down by just one basis point from – 3.49 to 3.48 per cent. I think there’s still enough margin for this to come down more, though, so we might see further drops next year.

“Meanwhile, the average rate across all other higher LTVs have gone up slightly – for example, by one basis point at 60 per cent LTV, by four at 70 per cent LTV… increases specifically from Virgin Money NatWest, the Bank or Ireland and Cumberland Building Society.

“However, the reason for these modest rises is not adverse economic conditions, because lenders will only respond to bigger indicators, such as unemployment going up. It’s difficult to make a play on uncertainty.”

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