Brits face paying £800 more for their mortgages a year as loan costs rise, worsening the cost of living crisis.
The cost of a two-year fixed-rate mortgage fell as low as 0.9% last year, but have now gone up to 1.89% on average.
That is due to two increases in Bank of England base rate, which is factored in to the cost of homeloans.
However, base rate has risen by 0.5% since December 2021, whereas the typical two-year fixed mortgage cost has increased by 0.89%, the Telegraph reports.
The mortgage cost increase means an extra £70 a month for homeowners repaying a £150,000 loan over 25 years.
David Hollingworth, of brokers L&C Mortgages, said: "Rates have been shifting rapidly as lenders adapt to higher borrowing costs from the central bank. The sheer pace of change is taking borrowers by surprise."
Earlier this month The Mirror reported that more Brits will be able to buy houses under plans from the Bank of England to scrap tough rules barring those on lower incomes from getting on the property ladder.
The Bank says that around 6% of people, 30,000 every year, have been forced to take out smaller homeloans due to this strict rule.
A further 6% of Brits have been unable to get mortgages at all.
The history is that, before the 2007 financial crash, mortgages were pretty easy to get.
It was not too difficult to borrow 100% of the value of a house, meaning no deposit was needed. Notoriously, some lenders would even lend up to 125%, often to people who would struggle to repay.
That all came tumbling down after the crash, when many households were unable to keep making their mortgage repayments and lost their homes.
In response, the Bank of England brought in a rule in 2014 to toughen up rules on who banks could give mortgages to.
This rule said anyone applying for a residential mortgage had to be able to afford repayments if mortgage rates rose.
In practice, that meant borrowers had to be able to afford mortgage rates of 3% plus their lender's 'standard variable rate' (SVR) - normally in the region of 4-6%.
So for example, anyone going for a mortgage at Halifax, one of the biggest lender, has to be able to afford mortgage repayments of 6.99% a month - 3% plus the lender's SVR of 3.99%.
The rule was brought in to protect buyers from losing their homes and getting into debt if mortgage rates go up, but since 2014 the opposite has happened and homeloan rates have been pretty low.
The upshot is that borrowers were being asked to prove they could afford mortgage rates of 6-9% when their actual mortgage could be as low as 1-2%.
What is changing?
The Bank is now consulting on removing this rule completely. There are fears that this could increase house prices.
But Nick Mendes, mortgage technical manager at broker John Charcol, said if this happened at all it would be short lived.
He said: "Will it make an impact to borrowing, yes, because you will be able to borrow slightly more. But longer term everyone will be in the same position."
