The average two-year fixed-rate homeowner mortgage rate has soared to levels last seen 15 years ago, according to Moneyfacts, which says that the average two-year fixed mortgage rate is now at 6.66%. This is the highest it has been since August 2008, at the peak of the financial crisis.

Mortgage rates last peaked in October 2022, when the average two-year fixed rate rose to 6.65% in the wake of the disastrous mini-budget, and the signs are that they could rise further, after official figures showed a shock rise in wage growth this week.

It is expected that interest rates will be higher for longer as the Bank of England tries to bring high inflation under control. Reflecting on the hike in rates, Rightmove’s mortgage spokesperson, Matt Smith, said: “Rates are up by an average of 0.13% this week, which though slightly higher than last week’s 0.12%, is weighted much more towards shorter-term rather than longer-term fixed deals. This reflects the ongoing view that rates will have to go higher to address inflation in the short term, but markets still believe they will fall back in the long-term.”