Lenders hike rates despite falling costs

Swap rates, which set the cost of fixed rate borrowing for banks, peaked three weeks ago according to Moneyfacts, but lenders have failed to pass on the cuts. Three-year deals are the most overpriced, says David Cook, mortgage expert at Moneyfacts, with an average rate of 7.25%. Swap rates for three-year deals peaked at 6.47% on 19 June. “It is now three weeks since the peak in swap rates and we would expect to see the cost of fixed rate deals starting to fall, but this isn't the case. In fact the opposite is true, with rates continuing to rise,” he says. Two-year deals have also risen ...