Weeks of turmoil on the financial markets have led to mounting pressure on homeowners as mortgage rates soar. More than 40% of all mortgage products were pulled after chancellor Kwasi Kwarteng's mini-budget last month triggered a slump in the pound and fears of further interest rate hikes.
The average two-year fixed mortgage rate is now close to 6% with a typical two-year fixed deal currently 5.75%, up from 4.74% on the day of the mini-Budget, according to financial information service Moneyfacts. The chancellor's mini-budget caused widespread panic in the markets after the government announced massive tax cuts including scrapping the top 45% rate and cancelling the increase to corporation tax.
The fall-out from the mini-budget led the government to perform a U-turn this week by cancelling its scrapping of the higher tax rate. While some mortgage lenders have since returned to the market with new deals experts have warned the government's about-turns are unlikely to lead to lower mortgage rates with uncertainty set to continue in the months ahead.
