Mortgage rates climb again to surpass Liz Truss' mini-budget peak

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Homeowners are facing yet another mortgage crisis after rates surged above the peak seen following Liz Truss' disastrous mini-budget last fall, reaching their highest high since the financial crisis.

While recent interest rate hikes by the Bank of England drive up the cost of borrowing, the average of two-year fixed rate transactions has reached 6.66% on Tuesday, according to figures from Moneyfacts.

That is to say higher than the 6.65% observed on October 20, 2022 in the context of the turmoil that followed the budget of Mrs. Truss and Kwasi Kwarteng, and rates are now at a level not seen since August 2008, at the height of the global financial crisis.

Two UK lenders, Santander and Nationwide Building Society, said the customers switching to new deals were hit by an increase in payments of around £200 per month.

These increases will put further pressure on homeowners, with millions of mortgage agreements expiring before the end of next year.

Rishi Sunak acknowledged that "things are tough" for families struggling with rising mortgage rates, but backed the Bank of England's hikes, saying the fighting inflation is "crucial".

Chancellor Jeremy Hunt and Bank of England Governor Andrew Bailey on Monday night called for wage moderation to help control inflation.

Always aiming to To curb soaring prices, the Bank of England last month raised interest rates by 0.5 percentage points to 5%, leaving homeowners scrambling to find ways to meet rising repayments of loans. with data making further hikes even more likely.

Sunak and Hunt under pressure from rising interest rates< /p>