Mortgage rates hit 15-year high, affecting first-time buyers and renters

Mortgage rates have hit the highest level in 15 years, with the average rate on a two-year fixed deal now at 6.66%, up from 6.51% in the aftermath of the mini-budget in October 2021.

This is a level not seen since August 2008 during the financial crisis.

The increase is due to lenders grappling with inflation and uncertainty over interest rates set by the Bank of England.

Mortgage providers have questioned about the impact on customers by MPs, and the Treasury Select Committee examined how mortgage-holders are trying to cope.

Some people are overpaying on current deals and considering extending their term.

The typical two-year mortgage rate is above the peak of October last year, and the average rate on a five-year deal remains below the level seen after the mini-budget.

The increase in mortgage rates is affecting first-time buyers, with people having to put down a larger deposit or buy a smaller property due to affordability.

Around 2.4 million fixed-rate mortgages are due to end between now and the end of 2024.

The recent rises in mortgage costs are likely to have a knock-on effect on renters, who could face higher payments as landlords seek to recoup the rising cost of higher mortgages.

Squeezed landlords may decide to sell properties, which could lead to fewer homes available to rent.

The article discusses the consequences of missing a mortgage payment and how lenders are required to treat borrowers fairly.

It also mentions a mortgage summit planned by the Labour party and encourages readers who are struggling with their mortgage payments to share their experiences with the BBC.