The average two-year fixed-rate mortgage on the market has breached 6% for the first time since 2008.
The last time the average two-year fixed-rate home loan was 6% or more was in November 2008, when it was 6.31%, Moneyfacts.co.uk said.
Across all deposit sizes, a typical two-year fix stood at 6.07% on Wednesday, creeping up from 5.97% on Tuesday.
Average five-year fixed-rate mortgages are hovering just below the 6% mark, at 5.97%.
The last time the average five-year fixed-rate home loan was 6% or more was in February 2010 at 6.00%.
Fixing for longer may seem more appealing— Rachel Springall, Moneyfacts.co.uk
In December last year, the average two-year fix was 2.34%. Based on someone having a £200,000 mortgage paid back over 25 years, their average monthly payments at that rate could have been £881.20, Moneyfacts calculated.
But based on current average rates, they could face paying £1,297.17 per month – a difference of nearly £416 or nearly £5,000 per year.
The choice of mortgages is gradually improving after many lenders pulled deals from sale last week, with 2,371 products available on Wednesday, up from 2,358 on Tuesday.
Rachel Springall, a finance expert at Moneyfacts.co.uk, said: “Borrowers may well be concerned about the rise to fixed mortgage rates but it’s essential they seek advice to assess the deals that are available to them right now.
“The drop in product availability may be worrying but many lenders have been vocal to stress their withdrawals are temporary amid interest rate uncertainties.
“Fixing for longer may seem more appealing, particularly as both the average two- and five-year fixed rates rise to levels not seen in over a decade.
“Consumers must carefully consider whether now is the right time to buy a home or to wait and see how things change in the coming weeks.”
This is not the kind of growth Britons want to see— Liberal Democrat Treasury spokeswoman Sarah Olney
Liberal Democrat Treasury spokeswoman Sarah Olney said: “This is not the kind of growth Britons want to see.”
Lending giant Halifax updated its rates on Wednesday, reflecting the recent increase in mortgage pricing.
A Halifax spokesman said: “The new rates reflect the continued increase in mortgage market pricing over recent weeks.”
The new rates from Halifax include a two-year fixed-rate up to 75% LTV at 5.84% and five-year fix up to 75% LTV at 5.44%.
Meanwhile, data researchers Moody’s said on Wednesday: “The likelihood of a decline in European home prices continues to increase as inflation and interest rates surge and economic growth slows.”
