Fixed Mortgage Rates Soar to 6.66%, Hit Levels Not Seen Since 2008

Fixed mortgage rates have increased to 6.66%, higher than the levels seen in the mini-budget of the previous government.

This has resulted in higher monthly payments for those taking out new loan deals.

The average two-year fixed mortgage rate is now at a level last seen in August 2008.

The increase in mortgage rates is due to expectations that the Bank of England has more work to do to bring down inflation.

The prospects for a pause in the rate hike cycle were damaged by a shock rise in wage growth, which was 7.3% from March to May.

Mortgage lenders are providing help to customers, such as the option to switch to interest-only payments and extend the mortgage term to reduce payments.

Mortgage rates have also been raised deliberately by some market participants to make them uncompetitive.