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The cost of two-year fixed rate mortgages in the UK has surpassed the highs reached in the wake of last autumn’s “mini” Budget, as banks and building societies push up prices in response to interest rate increases.
Lenders have responded to rising interest rates and expectations of further tightening by ratcheting up the cost of borrowing, with the average rate on a two-year fixed mortgage hitting 6.66 per cent on Tuesday, according to data provider Moneyfacts. That is the highest level since 2008.
Two-year fixed rate mortgages previously peaked at 6.65 per cent on October 20 last year, after the unfunded tax cuts in then prime minister Liz Truss’s “mini” Budget triggered intense market volatility.
The latest peak will pile greater pressure on thousands of homeowners and prospective buyers already squeezed by the higher cost of living,…
