Two-year fixed rate mortgages have hit a 14-year record high at an average 6.53% pa according to MoneyFacts.
This is going to hurt as it is estimated that 100,000 mortgage deals per month are coming to the end of their fixed rate period.
To add insult to injury. The Office for National Statistics has today released Consumer Prices Index inflation figures at 10.1% pa for September (up from 9.9% pa in August). It was the cost of food that pushed prices up even higher in September despite fuel prices falling. Our real tell-tale sign for inflation, the old measure of inflation i.e., the Retail Prices Index (RPI) hit 12.6% pa (up from 12.3% pa in August).
Increases in mortgage costs not just for first time buyers but also for existing owner remortgages is going to add to inflation. Inevitably the Bank of England will increase interest rates on 3rd November adding more mortgage costs misery. We are likely to head for property prices falls.
That said, before we all blame Truss and Co, remember inflation is a global thing. CPI in UK is 10.1% pa. It is currently 10.9% pa in Germany.