The average two-year fixed-rate homeowner mortgage rate has soared to levels last seen 15 years ago.

According to Moneyfacts, the average two-year fixed mortgage rate is now at 6.66%. This is the highest it has been since August 2008, at the peak of the financial crisis.

Mortgage rates last peaked in October 2022, when the average two-year fixed rate rose to 6.65% in the wake of the disastrous mini-budget, and the signs are that they could rise further, after official figures yesterday showed a shock rise in wage growth.

It is expected that interest rates will be higher for longer as the Bank of England tries to bring high inflation under control.

Speaking from Vilnius, the prime minister Rishi Sunak said: “I know things are difficult for many families across the country.”

He insisted that the “crucial thing that we have to do is bring inflation down”, and that is likely to mean further interest rate rises.

Reflecting o the hike in rates, Rightmove’s mortgage spokesperson, Matt Smith, said: “Rates are up by an average of 0.13% this week, which though slightly higher than last week’s 0.12%, is weighted much more towards shorter-term rather than longer-term fixed-deals. This reflects the ongoing view that rates will have to go higher to address inflation in the short term, but markets still believe they will fall back in the long-term.

“With even the best-buy short-term fixed-deals now approaching 6%, and the average mortgage rate across all two-year fixed Loan-to-Value (LTV) products now topping 6%, it is likely to be a blow to those looking to take out a mortgage soon, and some may be having to reassess what they can afford or temporarily pause their plans.

“However we are continuing to see a healthy level of buyer demand, with enquiries to go and view properties for sale still above 2019 levels. Many determined movers are navigating rather than stepping away from the market, with the gradual increase in mortgage rates we’ve seen over the last few weeks perhaps easier to manage than the sudden shock of the post-mini-budget period, when many products rose more than 1% in a week.”

The top table tracks 85% and 60% LTV for a 5 year fixed-rate mortgage so you can quickly see the trend at a glance. Further LTVs for 2 and 5 year fixed rates are in the tables that follow. All rates are based on products with a circa £999 fee. Rightmove can now provide mortgage rates across all LTVs for 95% of the mortgage market to exclude specialist lending.

• The average monthly mortgage payment on a first-time buyer type property for someone taking out a five-year fixed, 85% LTV mortgage is now £1,204, up by £5 per month compared to last week
• The average monthly mortgage payment on a first-time buyer type property for someone taking out a five-year fixed, 60% LTV mortgage is now £842 up by £15 per month compared to last week

*The average asking price for a first-time buyer type property (2 bedrooms and fewer properties) is now £226,412

Average mortgage rates to be credited to Rightmove. The data is provided by specialist mortgage technology provider Podium Solutions. The data covers 95% of mortgage lending, to exclude specialist lenders. All rates are based on products with a circa £999 fee. If you would like further data on different LTVs or fixed terms, please contact us.

Via @PropertyIndustryEye