Mortgage rates fall for the first time in more than a fortnight

Mortgage rates have fallen for the first time in more than a fortnight in a small reprieve for borrowers reeling from market chaos.

The cost of a five-year fixed-rate mortgage slid to 6.28 per cent yesterday, according to Moneyfacts, after hitting a near 14-year high of 6.32 per cent on Wednesday. A year ago, they were just above 2 per cent.

Rates on two-year deals remained at 6.46 per cent, the highest since August 2008.

The cost of a five-year fixed-rate mortgage slid to 6.28% according to Moneyfacts, after hitting a near 14-year high of 6.32% on Wednesday. A year ago, they were just above 2%

But it came as the Bank of England warned that lenders were planning to slash their mortgage offerings, anticipating a rise in the number of households which would struggle to pay them back.

Its credit conditions survey, which tracks banks’ expectations for their mortgage lending in the final three months of the year, slumped to a reading of minus 41.

If these predictions prove correct, it would be the weakest period of mortgage lending outside the first Covid lockdown since the 2008 credit crunch.

Debt markets have been thrown into disarray by Chancellor Kwasi Kwarteng’s mini-Budget.

The cost of living crisis is also eating into household budgets.