Homeowners suffer as cheapest mortgages double in price

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Top mortgage rates have nearly doubled in just five months as lenders clinched the cheapest deals daily amid inflation fears.

Analysts have warned that the cheapest deals borrowers enjoyed last year were “long gone”, adding to the pressure on households already struggling with rising bills.

The best two-year fixed rate in September was a record 0.79pc with Platform, part of the Co-operative Bank. The best buy has now nearly doubled to 1.49pc, available from Barclays.

A borrower with an outstanding balance of £250,000 would have paid £11,016 a year for their loan before, compared to £11,988 now as rates have risen. This is an increase of 8.8pc, or £972 per year.

The costs of longer-term mortgages have also increased. The cheapest five-year fixed rate in September was 0.94pc, with HSBC, after a price war between lenders pushed those mortgage transactions below 1pc.

The best price on a five-year fixed mortgage has now risen to 1.74pc with rival lender First Direct.

Mark Harris, of broker SPF Private Clients, said: “The lowest mortgage rates are long gone and several lenders are raising prices ahead of the Bank of England‘s next interest rate decision in March.

“Rates can be booked up to several months in advance, so those needing a new deal may want to plan ahead and get a rate before the most competitive mortgages hit. disappear.”

Since the Bank of England made its second consecutive interest rate hike earlier this month, lenders have been rushing to raise rates ahead of another expected increase in the Bank Rate.

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