Average two-year fixed mortgage rate soars to 6.66% - the highest figure in 15 years

Pressure on mortgage holders could increase even more if the Bank of England puts up rates again, as ITV News' Carl Dinnen reports.

The average two-year fixed-rate mortgage has passed the peak seen in the wake of the government’s mini-budget last year.

Two-year fixed deals have now reached 6.66% on average, according to Moneyfactscompare.co.uk – a level not seen since August 2008.

It comes as mortgage rates rise on the back of the Bank of England's interest rate hikes as monetary policymakers attempt to tackle rampant inflation.

Moneyfactscompare said the rates had increased from 6.63% on Monday and were just higher than the 6.65% peak reached on October 20 last year during the crisis days of Liz Truss' leadership.

The last time mortgage rates were this high was during the height of the financial crisis. Credit: PA

The average five-year fixed-rate homeowner mortgage also peaked at 6.51% on that date, according to the website.Mortgage rates later settled down, but then started to rise once more amid expectations that interest rates will be higher for longer as the Bank of England tries to subdue stubbornly high inflation.

Average two and five-year fixed-rate mortgages recently jumped back over the 6% mark.

The Bank of England uses base rate rises as a tool to try to subdue inflation and the base rate is currently sitting at 5%, following 13 rises in a row.

In further signs of the pressures on inflation, new figures showed that wages have increased at a record rate.

The Office for National Statistics (ONS) revealed on Tuesday that average regular pay, not including bonuses, was 7.3% higher in the three months to May compared with the same period last year.

When to fix a mortgage - and how to deal with rent hikes

Moneyfacts’ figures also show that the average five-year residential mortgage on Tuesday was 6.17%.

The website took the full range of mortgage deposit sizes into account.

Around 2.4 million fixed-rate mortgages are due to end between now and the end of 2024, according to figures from trade association UK Finance.

Chancellor Jeremy Hunt recently held a summit with mortgage lenders and a new mortgage charter was agreed to compel banks to support those who are struggling.

Lenders will be able to offer borrowers a switch to interest-only payments for six months, and an extension to their mortgage term to reduce their monthly payments, with the option to switch back within six months.

Both options can now be offered without an affordability check.

A borrower will not be forced to leave their home without their consent unless in exceptional circumstances, in less than a year from their first missed payment.

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