Average five-year mortgage rate hits 12-year-high

A typical five-year fixed rate mortgage has hit 6.02%, the highest figure since the 2010 financial crisis.

Mortgage rates have been rising throughout 2022, but there was a significant increase after the mini-budget announcement on 23 September.

The average two-year mortgage also hit its highest rate since the 2008 financial crisis at 6.07%.

Following the announcement, a large number of lenders removed their mortgages from the market. Between 28 September and 5 October, the number of products on the market dropped from 3,961 to 2,371.

Prime Minister Liz Truss addressed homeowners’ concerns in her speech at the Conservative Party conference, citing the stamp duty cut as one measure the Government is taking to offset the cost of living crisis.

Those most affected by the increased rates include first-time buyers and homeowners looking to remortgage.

An average of 100,000 people a month will be coming to the end of their current mortgage from October, and will also see a sharp rise in their monthly repayments.

Rachel Springall, press officer at Moneyfacts, said:

“The mortgage market has seen relentless rate rises this year, and borrowers coming off a fixed mortgage will find the cost to secure a new deal is much higher than they were perhaps anticipating.