The average five-year fixed-rate mortgage on the market has breached 6% for the first time in 12 years, as the crisis in the lending market deepens.
Across all deposit sizes, two-year and five-year fixed rates now both stand at more than 6% on average, according to Moneyfacts.co.uk.
The average five-year fixed-rate mortgage rose to 6.02% this morning, Moneyfacts said, having crept up from 5.97% on Wednesday.
The last time average five-year fixed-rate mortgages were at 6% was in February 2010, when the typical rate was 6.00%.
The average two-year fixed-rate mortgage is now 6.11%, having breached the 6% mark on Wednesday, for the first time since November 2008.
Surging mortgage rate will force more lenders into arrears, economists fear, and also push down house prices.
The Centre for Economics and Business Research warned this morning:
“With average mortgage rates set to reach more than 20-year highs by mid-2023, and stagflationary pressures set to reduce real earnings further, affordability will worsen next year.”
“Accordingly, annual house price growth is expected to enter negative territory during the first half of 2023, with an overall annual contraction of 3.9% expected across the whole year.”