Mortgage rates soar to highest level for 15 years

Mortgage costs have hit the highest level for 15 years after the rate on a two-year fixed deal surpassed the peak in the aftermath of the mini-budget.

The average rate on such a deal is now 6.66% - a level not seen since August 2008 and the financial crisis.

Mortgage costs have been soaring recently as lenders grapple with inflation and uncertainty over interest rates set by the Bank of England.

Lenders have been questioned by MPs about the impact on customers.

Bank and building society bosses, including representatives from Lloyds and Nationwide, were in front of the Treasury Select Committee.

The hearing covered mortgage stress faced by borrowers, lenders' response to people falling behind on repayments and the wider impact on the UK housing market.

Mortgage providers said people fixing deals at rates now would typically face an increase of about £350 a month in their repayments, but there remained relatively low numbers of people falling behind partly because unemployment remains low.

The committee examined how mortgage-holders are trying to cope, with some people overpaying on current deals and considering extending their term.