Mortgage Costs Soar as Bank of England Expected to Increase Base Rate to 5.5%

The Bank of England's expected increase in the base rate to 5.5% by November is causing mortgage costs to rise, with Nationwide raising interest rates on new fixed-rate mortgages by 0.45 percentage points.

Other lenders may follow suit, which could influence other lenders to reconsider their own propositions.

The average two and five-year fixed-rate mortgages are now 5.35% and 5.02%, respectively, and core inflation is at a 30-year high.

The central bank has been consistently raising interest rates since December 2021 in an effort to bring down inflation to its 2% goal, but the inflation fall is not automatic and may not necessarily lead to a recession if necessary.