Mortgage rates were hiked again as the UK heads into a ‘big reset’.
The interest rate approaches six percent on a two-year fixed deal.
The change is expected to lead to 2.6 million payments of thousands of pounds extra a year by the end of the year.
Interest rates are also expected to continue rising as the Bank of England looks to redouble its efforts to contain inflation.
The change is expected to result in 2.6 million paying thousands of pounds extra a year by the end of the year
The move is likely to put even more pressure on Britons as the cost of living crisis continues to grip the nation.
The average mortgage rate on a new two-year deal today is 5.86 percent.
It was 5.83 percent last Friday and 5.33 percent a month ago.
Five-year deals also saw an increase to 5.51% today.
Homeowners have seen their mortgage rates spike in recent weeks
The longer contract was just over five percent a month ago.
However, the number of mortgage products available continued to decline.
The data, provided by financial experts at Moneyfacts, revealed that just 4,952 mortgage products were available today, down from 5,300 a month ago.
Experts in the City have warned that the UK is facing a “major mortgage reset” after only a third of borrowers on cheap fixed-term deals have given up on them.
A Square Mile source told The Times: “There will be a big reset on mortgages for the next nine months.
“Only one-third gone so far, two-thirds to go.”
A study by Capital Economics showed that 3.2 million of these households have a rate of at least three percent.
The figure is expected to rise to 5.8 million by the end of next year.
The housing market remains volatile after worse-than-expected inflation data released last month put the consumer price index at 8.7 percent.
A study by Capital Economics showed that 3.2 million of these households have a rate of at least three percent
Traders expect the Bank of England to raise the key interest rate to 5.5% by the end of the year.
Interest rates are currently 4.5%, but the Bank will provide its next update on 22 June.
Rising mortgage rates are expected to cost borrowers £9bn this year and next, the Center for Economic and Business Research has said.
The Financial Conduct Authority also said around 116,000 borrowers were due to exit fixed rate deals this month.
Property website Rightmove even indicated that interest rates on home loan deals had risen by an average of 0.39 per cent in the past week.