The average rate on a new two-year fixed mortgage has risen above 6% for the first time since 2008, according to data that will intensify concern about the crisis in the home loans market.
News that the typical new rate had climbed to 6.07% comes on the day that chancellor Kwasi Kwarteng is due to meet with executives from Britain’s biggest banks to discuss the impact of the financial markets turmoil on mortgages and availability.
Moneyfacts, a financial data provider, said the average new two-year fixed rate had risen again and broken through 6% on Wednesday, up from 5.97% on Tuesday, having already risen to 5.75% on Monday.
The average two-year fix has increased from an average of 4.74% on 23 September, the day of the mini-budget. At the start of December last year, the average was 2.34%.
Moneyfacts said the last time the rate was 6% or more was in November 2008, when it reached 6.31%. That was weeks after the collapse of Lehman Brothers and the start of the financial crisis.
Soaring mortgage rates are having a huge impact on expected repayments for homeowners - someone who took out a £200,000 25-year repayment mortgage at a rate of 2.34% would be repaying £882 a month. On a rate of 6.07% it would be £1,297, or £415 more.
Moneyfacts also said the number of new standard mortgage deals available rose very slightly on Wednesday to 2,371, up from 2,358 a day earlier.