Strains deepened in the mortgage market in June with the rates on offer by banks and building societies continuing to rise despite weak demand for loans.
The Bank of England’s monthly survey of mortgage quotes confirmed a large rise in the price of fixed-rate lending, an unwillingness to lend to borrowers with small deposits and less attractive deals for mortgage products that track the Bank’s policy rate.
Average two-year fixed mortgage rates for borrowers seeking a loan covering no more than 75 per cent of their property’s value rose from 6.26% at the end of May to 6.63% at the end of June. This raised the cost of such loans to their highest level since February 2000.
racker rates also rose from an average of 6.17% to 6.32% over the same period.