Mortgages continued to become more expensive despite the gradual increase in the number of products on the market.
The average mortgage interest rate on a two-year fixed-term contract mortgage is now 6.3%, according to data compiled by financial news firm Moneyfacts.
A similar rise has taken place in the average five-year fixed-term mortgage, which now has an average rate of 6.19%.
Prior to October 5, such high rates of more than 6% hadn’t been seen since the financial crash of 2008.
As of the September 23 mini-budget day, the average two- and five-year fixed-rate mortgages were 4.75%, but that rose significantly in the following weeks.
Households now spend on average 27% of their income on mortgage repaymentsthe bulk of household income on mortgage payments since 1989.
The the number of mortgages on the market has decreased from the mini-budget like the bank of england signaled that he would raise interest rates to curb inflation. The Bank’s statements have created uncertainty among lenders about the size and timing of the rate hike.
While the number of mortgage products on the market has increased in recent days, there are still around a thousand fewer than when Kwasi Kwarteng made its mini-budget announcement. As of Monday morning, there were just 2,905 mortgages on offer, down from 3,961 on September 23.
“Mortgage products are starting to come back after lenders temporarily withdrew offers amid interest rate uncertainty, but there is still a long way to go from the level of choice seen before the mini-budget,” he said. said a Moneyfacts spokesperson.
“Consumers need to carefully consider whether now is the right time to buy a home or mortgage, or wait and see how things change in the weeks ahead.”
The British pound has fallen sharply since the gains made against the dollar last week and at the low of trading this morning, £1 bought $1.1027.
Last week, the pound was back to levels just below $1.15 following government reversals on its mini-budget fiscal policy.
This fell to a low of $1.1054 on Friday evening as the US unemployment rate fell, raising fears that the US central bank – also known as the Fed – could raise interest rates to slow growth. in order to reduce inflation.
The cost of borrowing for the UK government was 4.7%, more expensive on Monday as interest payments on the gilt yield on long-term government bonds hit the high of 5% seen before the Bank of England intervention to avoid a collapse of the pension market.