INTEREST rates on typical two and five-year fixed rate mortgages have hit their highest for a decade.
The rate on a typical two-year fixed rate mortgage hit 6.31%, according to Moneyfacts, the highest for 14 years.
The rate on a typical five-year fixed rate mortgage deal has also soared to 6.19% - the highest for 12 years.
Before October 5 such high rates of more than 6% hadn't been seen since the 2008 financial crash.
UK interest rates were increased to 2.25% at the end of last month - the seventh time in a row the Bank of England has raised based rates in an attempt to get control over rising prices.
Interest rates have been rising since last December as inflation has soared to its worst level in four decades.
Last December, the typical two year and five year fixed interes rate was 2.38% and 2.63%.
Analysts have warned that higher base interest rates, rising inflation and the risk of recession could lead to house prices falling by between 10% and 15%.
It comes as the Chancellor was urged to “act now” as analysis suggested more than 300 Scots households are facing “staggering hikes” in their mortgage payments every day.
The Liberal Democrats are warning of a “mortgage ticking time bomb”, as the party predicts that between now and the expected release of Kwasi Kwarteng’s medium-term fiscal plan on November 23, roughly 168,000 more UK homeowners will have been hit by a new higher rate.
This is based on figures attributed to UK Finance showing 600,000 fixed-rate mortgage deals are coming to an end in the second half of 2022, equivalent to an average of 3,296 a day.
A Moneyfacts spokesman said: “Mortgage interest rates are continuing to rise, so borrowers comparing fixed deals would be wise to seek advice to see what options are available to them.
"Mortgage products are starting to return after lenders temporarily withdrew deals amid interest rate uncertainty, but there is still much more room for improvement compared to the level of choice seen before the mini-budget. Consumers must carefully consider whether now is the right time to buy a home or remortgage, or to wait and see how things change in the coming weeks.”
Now households spend an average of 27% of their income on mortgage repayments, the greatest portion of household income on mortgage payments since 1989.
The number of mortgages on the market has also fallen since the mini-budget as the Bank of England signalled it would increase interest rates to curb inflation. The Bank's statements caused uncertainty among lenders over how much rates would increase and when.
Chancellor of the Exchequer Kwasi Kwarteng plans to plans to meet with backbench MPs at a gathering of the Conservative Party’s influential 1922 Committee on Wednesday.
MPS have been returning to Parliament on Tuesday for the first time since Mr Kwarteng’s controversial fiscal statement on September 23 which triggered a market rout and led to a fractious Tory conference.
Some experts think Bank of England base rates could rise from 2.25% to 6% next year, as it battles against high inflation - currently 10.1%.
Executives from mortgage giants including Lloyds Banking Group Plc and NatWest Group Plc highlighted stress among customers with buy-to-let and interest-only mortgages, while discussing measures to help including extending the Mortgage Guarantee Scheme, a programme that helps first-time buyers purchase a property and is due to expire at the end of 2022.
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