The average rate for a two-year fixed mortgage has climbed to 6.01%, rising above 6% for the first time since the end of last year, according to new data from Moneyfacts.
Lenders including HSBC, Nationwide and Halifax have been adjusting their fixed rate ranges in recent weeks to reflect the fact that the Bank of England base rate is now expected to rise by more than previously forecast.
The last time average two-year fixed rate mortgages went above 6% was in the wake of the mini-Budget last autumn. Previously, the rate had not reached the 6% mark since November 2008.
The average two-year deal peaked at 6.65% on 20 October 2022, before finally dropping below 6% in December. Rates continued to edge down, dropping to a low of 5.24% in April before beginning to rise again.
Rates are also rising for five-year fixed deals, with the average currently standing at 5.67% compared with last year’s peak of 6.51%. This is unusually cheaper than the average two-year deal, Moneyfacts noted.
On Monday morning, Rishi Sunak appeared to rule out providing any extra support for mortgage holders.
“I know the anxiety people will have about mortgage rates,” the prime minister told ITV’s Good Morning Britain.
“That is why the first priority I set out at the beginning of the year was to halve inflation because that is the best and most important way that we can keep costs and interest rates down for people.”
