Average mortgage rate rises above 6% for two-year fixed deal

The average mortgage rate for a two-year fixed deal has risen to 6.01%, according to a financial information company.

Meanwhile, the average five-year fixed rate mortgage has increased to 5.67%, Moneyfacts said.

The two-year rate has risen from 5.98% on Friday, while the five-year deal has increased from 5.62%.

A two-year fixed deal is at a high not seen since 1 December – as the market reeled from Liz Truss government’s botched mini budget.

Before then the rate had not reached the 6% mark since November 2008.

It comes as the prime minister declined to back extra support for mortgage holders despite higher interest rates making payments more expensive.

Asked if the government will introduce financial support for mortgage bills, similar to those introduced to help with energy bills, Rishi Sunak said he understood the public concern but his priority is to bring inflation down.

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“I know the anxiety people will have about mortgage rates,” Mr Sunak said.

“That’s why the first priority I set out at the beginning of the year was to halve inflation because that’s the best and most important way that we can keep costs and interest rates down for people.

“We’ve got a clear plan to do that. It is delivering. We need to stick to the plan.”

Sir Keir Starmer ruled out direct mortgage support too and told Sky’s Kay Burley show that Labour would “help people with their bills” with a higher windfall tax on oil and gas companies.

The Moneyfacts data also shows a drop in availability of mortgage products.

A total of 4,683 mortgages are on the market, down from 4,923 on Friday – but still more than the 3,890 on offer before the September mini budget of unfunded tax cuts and increased spending.

The Resolution Foundation think tank has said average annual mortgage repayments are set to rise by £2,900 for those renewing next year.

‘Risky’ to intervene

Former Bank of England deputy governor Sir Charlie Bean warned against government intervention, saying it would be “risky” for the government to protect mortgage holders against rising interest rates.

Meanwhile, a Treasury source said: “Borrowing money to subsidise mortgages risks fuelling inflation further, forcing the Bank of England to respond with even higher interest rates. It would be totally self-defeating.”

The Bank is forecast to rise rates again on Thursday.

Mr Sunak pointed to existing support for first time buyers to help get them on the property ladder.

He said: “There is also support available for people – we have the mortgage guarantee scheme for first-time buyers, we have the support for mortgage interest scheme to help people as well. That’s why one of my first priorities is to halve inflation.”

‘Horror show’

However, the government has been urged to take action.

Liberal Democrat leader Sir Ed Davey said the time “to step in is now” and that “anything else will be a disaster for struggling families worried about losing their homes”.

He called on Mr Sunak “to finally listen to those who need help and immediately end this mortgage horror show with a mortgage protection fund”.

Are you struggling because of rising rates? Sky News is keen to hear from people who are due to refix their mortgages, are on variable rates or are trying to get on the housing ladder. Email us your stories at sky.today@sky.uk