Interest rates on mortgages climb past 6% for first time in half a year
In the current financial landscape, the climb in two-year fixed mortgage rates has seen a significant increase, marking the highest spike since the 1st of December 2022. As of today, the average rate for a two-year fixed mortgage stands at 6.01%.
Photographer Scott Graham captures this evolving financial landscape in the current article.
Meanwhile, the average rate for a five-year fixed mortgage has risen to 5.67%. This trend, coupled with the rising costs of living, has led many individuals to struggle with the increasing expenses.
The Prime Minister, Rishi Sunak, has declined to provide extra support for mortgage holders, emphasizing the need to stick to the plan for reducing inflation. The government's focus, according to Mr. Sunak, should be on bringing inflation rates down.
The Bank of England interest rates are currently at 4.5%, and they are due to rise again on Thursday for the 14th time. However, it's important to note that there is no specific information stating who made the commitment to raise the Bank of England base rate 14 times in 2023; sources indicate that the Bank of England actually cut its base rate three times in 2023, from 4.75% to 4.00%.
In recent weeks, mortgage lenders have been rapidly increasing rates and pulling deals. The availability of mortgage products has dropped, with 4,683 mortgages on the market, down from 4,923 on Friday. Despite this drop, there are still more mortgage products available than before the September mini budget (3,890).
The government's mortgage guarantee scheme for first-time buyers offers lenders a guarantee on mortgages, compensating them for a portion of net losses suffered in the event of repossession. However, leading UK banks like Santander have pulled mortgage deals for new borrowers in recent weeks.
Sir Charlie Bean, the former Bank of England deputy governor, has warned against government intervention to protect mortgage holders against rising rates, stating it would be 'risky'. Instead, the focus remains on navigating the challenging economic conditions and finding sustainable solutions for homeowners and the broader economy.
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