The gap between the average maturing two-year fixed rate and the average standard variable rate has widened, says Moneyfacts.
Data provided by the firm outlines that in May 2017, the average two-year fixed rate was 2.30 per cent, and the SVR in May 2019 was listed at 4.89 per cent, meaning that a borrower would suffer a 2.59 per cent rate increase after the fixed term ends.
Looking at June 2017, the average two-year fixed rate remained at 2.30 per cent. However, the SVR in June 2019 was 4.90 per cent – a 2.60 per cent rise.
In July 2017, the average two-year fixed rate fell to 2.26 per cent, and the SVR, as of July 2019, remained at 4.90 per cent, resulting in a 2.64 per cent rise upon maturity.
Moneyfacts finance expert Darren Cook says: “Despite the average provider SVR remaining static over the past couple of months, the fall in average two-year fixed rate mortgage rate between May and July 2017 has meant the gap between the average maturing two-year fixed deal and the revert to rate has increased.
“Moreover, the jump between the two rates is likely to increase further still in the coming months if the average SVR continues to remain fairly static, as the average two-year fixed rate in 2017 continued to fall.
“The increasing gap between the average maturing two-year fixed rates and the current average SVR will likely result in affected borrowers looking to remortgage to a better deal sooner rather than later.”