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Evening Standard
Evening Standard
Nicholas Cecil

Average 5-year fixed-rate mortgage hits 6.3 per cent deepening UK’s home loan misery

Britain’s home loan misery was growing on Friday as the average five-year fixed-rate mortgage hit 6.3 per cent.

The average 2-year fixed residential mortgage rate was 6.78 per cent, according to figures from, up from 6.75 per cent on Thursday.

The average 5-year fixed residential mortgage rate was 6.30 per cent, up from 6.27 per cent.

Mortgage rates have jumped in recent months amid expectations that interest rates will stay higher for longer to combat stubbornly high inflation.

Many lenders recently signed up to a mortgage charter to support struggling borrowers and banks and building societies have been encouraging customers who are having difficulties with their payments to contact them as soon as possible.

The Bank of England has warned that nearly four million more homeowners faced mortgage bill increases by the end of 2026.

It stressed that for the typical mortgage holder their monthly interest payments were expected to rise by some £220 if they come off a fixed rate deal and have to pay a rate 3.25 percentage points higher.

But around a million households would see seen their monthly repayments go up by about £500, and some 200,000 by more than £1,000, with tens of thousands of these almost certainly in London given the exorbitant property costs.

Lloyds Banking Group remained the UK’s biggest mortgage lender last year, lending £52.7 billion in 2022, according to figures from trade association UK Finance.

Lloyds had a 16.8 per cent market share in terms of the amount lent last year, which shrunk compared with the 18.1 per cent market share it had for the amount it lent in home loans in 2021.

NatWest, Nationwide and Santander were among the lenders who increased their market shares, in terms of the value of mortgage lending in 2022, compared with 2021.

Overall, Lloyds Banking Group had a 19 per cent market share, based on all mortgage balances outstanding in 2022, making it the biggest mortgage lender for outstanding balances.

NatWest Group was the second biggest mortgage lender in terms of mortgages handed out last year, with £41.5 billion advanced, giving it a 13.2 per cent market share.

In terms of all mortgage balances outstanding in 2022, Nationwide Building Society was the second biggest lender, with a 12.5 per cent market share.

Nationwide was the third biggest mortgage lender in 2022 in terms of mortgages advanced in that year, with £37.8 billion of home loans handed out in 2022, giving it a 12.1 per cent share of last year’s mortgage lending.

The figures also showed that Virgin Money moved up the rankings to become the seventh biggest mortgage lender in terms of loans advanced in 2022, up from ninth place in 2021.

In 2021, it handed out £9.8 billion of mortgages and in 2022 this increased to £10.5 billion.

Virgin Money swapped places with Coventry Building Society, which was ranked seventh in 2021 and ninth in 2022 for mortgage lending in those years.

All other mortgage lenders in the top 10 maintained the same positions in 2021 and 2022 for lending in those years.

Looking at total mortgage balances outstanding in 2022, NatWest Group overtook Santander UK last year.

NatWest Group was ranked in third place for 2022, having been fourth in 2021, while Santander UK, which was placed third in 2021, was pushed into fourth place in 2022.

However, Santander still increased its market share in terms of the value of mortgages outstanding, from 11.1 per cent in 2021 to 11.3 per cent in 2022.

The figures were released earlier this week on the same day a Bank of England quarterly survey of lenders was published.

The credit conditions survey found that losses and default rates on mortgages have increased in the past few months and are expected to rise further in the months ahead.

Mortgage availability is also expected to fall in the three months to the end of August, according to the survey of lenders.

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