Hard-pressed UK mortgage holders continue to be squeezed by surging interest rates, with the average rate on a two-year fix now hitting 6.63% and five-year deals now averaging 6.13%.
Mortgage costs have ratcheted up as the Bank of England continues to press on with draconian interest rate hikes to combat stubbornly high inflation.
They are now close to highs briefly touched in October 2022, when two-year fixes hit 6.65%.
Mortgage rates spiked after short-lived prime minister Liz Truss and her chancellor Kwasi Kwarteng’s infamous mini-budget on September 23.
The mini-budget’s widespread, unfunded tax cuts caused a sharp fall in the pound and a surge in borrowing costs which instantaneously filtered down to consumer lending.
Barring the mini-budget anomaly, mortgage rates were last seen this high in August 2008 in the midst of the global financial crisis.
Renters are also feeling the effect of high mortgages, with rising costs being passed through to lodgers, with fewer available homes to rent as landlords decide to sell their properties.
Banking bosses will face the Treasury Committee today to face questions on the current state of the mortgage market, including levels of mortgage stress, arrears and forbearance.
Representatives from Lloyds, Skipton and Santander will be among those giving evidence.