Mortgage market stabilises after last week’s mini-budget crisis

Fixed rate mortgages are still much higher than before the Mini-Budget, but the number of offers has risen again.

mortgage market

The mortgage market appears more stable this week after the chaos following the recent Mini-Budget.

In the last few days 100 mortgage products have been reintroduced by banks and building societies.

The total number of mortgage deals on offer plummeted by more than 40% in the days after the Mini-Budget.

Lenders concerned about possible Bank of England interest rate rises pulled their products with some suspending their entire mortgage range.

Mortgage products are now being offered again, although the average two-year fixed-rate mortgage is now 5.97 per cent, up from 5.75 per cent on Monday and 4.74 per cent on the day of the Mini-Budget, according to Moneyfacts.

The best two-year fixed rate mortgage is currently offered by Yorkshire Bank at 4.95%, with the most competitive five-year deal is 4.45% with Danske Bank, Moneyfacts data shows.

Raise rates

There are also some expectations that the Bank of England will raise its base rate from 2.25% after its monetary policy committee meets again on 3 November. The rate was increased by 0.5% last month to its highest level in 14 years.

Ray Boulger, John Charcol

Ray Boulger, senior manager at brokers John Charcol, told The Neg: “It looks a lot less rocky this week. I would say we have seen the worst of the big increases.”

He says it is likely the Bank of England will raise interest rates again, and people will definitely be paying more for their mortgages.

Joshua Raymond, director at financial brokerage XTB, agrees: “What we will likely see are borrowers moving to longer-term deals, but we do expect those rates to also see upward pressure so it’s likely that borrowers will be facing higher mortgage costs”.

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