Mortgage costs hit highest level in 15 years passing mini-budget aftermath peak

Mortgage costs have hit their highest level in 15 years after average rates on two-year fixed deals passed the peak of the mini-budget aftermath.

The average rate on Tuesday was 6.66%, up from 6.63% on Monday.

It comes as wages increased at the joint-highest rate on record, fuelling fears that inflation will continue to rise.

After the market was sent plummeting following Liz Truss and Kwasi Kwarteng’s mini-budget, the two-year rate peaked at 6.65% in October.

Lenders have been withdrawing and re-pricing deals rapidly – there are 287 fewer residential mortgage products on Tuesday compared with Monday.

The average five-year fixed rate mortgage has increased to 6.17%.

The buy-to-let sector saw the fixed rate rise to 6.83% on Tuesday, according to financial information company Moneyfacts.

Average regular wages during this period were 7.3% higher, the same as during the previous three months and the joint highest since records began in 2001.

The Office for National Statistics (ONS) said the UK unemployment rate jumped to 4% for the three months to May, from 3.8% in the previous three-month period.

Economists had predicted a reading of 3.8% for the latest quarter.