The UK mortgage market is experiencing its most intense turmoil since the mini-Budget of 2022, according to figures from Moneyfacts.
The average rate on two-year fixed deals has risen above 5%, the highest level since August, while five-year mortgages are at their most expensive since June.
Nearly 500 mortgage products have been pulled off the shelves in the last two days, the highest number since the aftermath of the mini-Budget, when Liz Truss was prime minister.
Market Response
Adam French, head of consumer finance at Moneyfacts, said: "Recent days have been some of the most turbulent in the UK mortgage market since the aftermath of the September 2022 mini-Budget."
French added: "It's unwelcome news for borrowers, as the prospect of falling mortgage rates has quickly given way to rate rises. How far they could go is now heavily dependent on how global markets and inflation expectations evolve as conflict in the Middle East unfolds."
Impact on Borrowers
For borrowers, the interest rate on a fixed mortgage does not change until the deal expires, usually after two or five years, and a new one is chosen to replace it.
Aaron Strutt, from broker Trinity Financial, said: "Most lenders allow their existing mortgage customers to secure a rate switch four months before their fixed or tracker rates expire. At the moment, some of the banks and building societies are still offering sub-4% fixed rates."
Fuel Price Increases
Petrol and diesel costs continued to rise in the UK due to volatile oil prices from disruption to Middle East supplies, with the average cost of unleaded petrol rising by 1p to 139p a litre, and diesel increasing by 2p to 155.1p, according to RAC head of policy Simon Williams.
Williams said: "If oil were to settle at around the $90 a barrel mark and the pound were to maintain its current position against the US dollar, drivers in the UK could expect average petrol prices to reach around 140p a litre, and diesel around 167p a litre.
