Average mortgage rates are the highest since the 2008 financial crisis, data suggests.
While U-turns in UK government policy are expected to calm markets and ease pressure on mortgage rates, this has not yet had an impact on consumers, according to Moneyfacts research.
The average interest rate on two-year fixed-rate loans rose to 6.53% on Tuesday, according to Moneyfacts.
That was the highest rate for such a deal since August 2008.
The average interest rate on a five-year fixed-rate mortgage has risen to 6.36%, the highest since November 2008, according to Moneyfacts.
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Mortgage rates have been rising for months as central banks hike rates to stem rising inflation, but have risen sharply since September on the impact of the government’s mini-budget on the market.
While new Chancellor Jeremy Hunt has reversed the £32 billion tax cuts of his predecessor Kwasi Kwarteng, pressure on mortgage rates has not eased.
At least 100,000 people face the end of their current mortgage contract each month and face a steep increase in monthly repayments.
The number of mortgages available to homebuyers fell sharply after the government’s mini-budget but has recovered somewhat – although there are still a lot fewer available compared to 2021.
Lenders have not only reduced the number of mortgages available, they have also increased mortgage rates.
One such lender is NatWest, which said “recent application volumes” are part of the reason.
Brokers have said there is still demand for mortgages, but lenders are wary of being inundated with applications as uncertainty lingers in the economy.
Eleanor Williams, finance expert at Moneyfacts.co.uk, said the mortgage sector “remains volatile”.
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