Mortgage costs climb as economy struggles with conflict
Major lenders are withdrawing home loan offers below 5% as rates reach a two-year high.
Homeowners are seeing mortgage rates climb to two-year highs with deals below 5% being withdrawn across the lending market, it has been revealed.
The ongoing conflict in the Middle East continues to affect the domestic economy and borrowing costs are rising.
Barclays withdrew its 4.75% two-year fixed rate and its 4.93% five-year deal for new customers this week, leaving its best rates above 5%, The Times reports. While Nationwide, Virgin Money and TSB also announced their rates were going up.
Two-year high
Moneyfacts, the financial date site, records that the average two-year fixed mortgage had risen to its highest since July 2024, while the average rate on a five-year home loan reached its highest since October 2023.
Inflation is running at 3.1% and the Bank of England Governor Andrew Bailey has warned that the Bank Rate may have to go up from 3.75% to combat it. This could come on 5th November when the Bank’s Monetary Policy Committee reveals its next decision.
The Bank has held the rate at all its recent meetings, including the last one in September, although some members of the MPC voted for a rise.
