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Rate rise “painful” for two-year borrowers

The recent rise in interest rate will be particularly painful for mortgage holders coming off a two-year deal and hoping to remain on a new fixed rate, says a leading analyst.

Lisa Taylor, analyst at moneyfacts.co.uk, says: Two years ago, one the of best deals available was at 4.47% with a fee of 399.

“Today a similar deal with Portman would be 5.34%, a 0.87% difference.

“For an average repayment mortgage of 150,000 over 25 years, this would mean you would have to find an extra 74 a month.

Taylor adds that the compound effect of the three interest rate rises has made little difference to how lenders have reacted in terms of increasing their SVR and tracker products.

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