Homebuyers hit as fixed mortgage rates hit 6%
Higher mortgage payments are beginning to kick in as lenders hike the average two-year fixed-rate close to 6%, threatening to dampen activity across the housing market.
A typical two-year fixed-rate deal jumped from 5.92% on Thursday to sit at 5.98% today, according to the website Moneyfactscompare.co.uk.
It is a new wave of hits for homeowners after mortgage rates soared amid market turmoil following the mini-Budget in September last year. That led to two-year deals around 6.65%.
About 1.5 million homeowners coming to the end of a fixed deal this year face moving to a much higher monthly bill. Rates may go up again this summer as the Bank of England is poised to raise the cost of borrowing next week and at least one more time this year.
Nationwide will become the latest lender to jack up rates, adding 0.7 percentage points from Friday.
The building society, one of the UK’s biggest lenders, said that the changes were being made because its own costs were rising.
Clydesdale Bank, said it was withdrawing deals via brokers later on Thursday owing to high demand.
NatWest’ (RBS) increased its rates twice last week, echoing a similar move by HSBC.
The government’s official forecaster, the Office for Budget Responsibility, suggested that UK house prices will fall by 10% by 2024 compared with last year’s peak.