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Daily Mirror
Daily Mirror
Business
Graham Hiscott

Liz Truss is blamed for inflation chaos as mortgage lenders hike rates yet again

Mortgage borrowers are facing the biggest squeeze since the Tories’ bungled mini-Budget.

A flood of lenders have upped rates in the aftermath of figures a fortnight ago revealing a smaller-than-expected drop in living costs.

Some of the best deals are being withdrawn at a few hours’ notice.

“Grab it while you can,” was the advice to borrowers from David Hollingworth, an associate director at broker L&C Mortgages.

He compared the situation to last September’s mini-Budget, when then-Prime Minister Liz Truss ’s handling of unfunded tax cuts led to rates soaring.

TSB has increased the rate on its two and five-year fixed deals by up to 0.75% and temporarily withdrawn 10-year deals.

Halifax has raised rates on its two-year fixed mortgages by up to 0.30%, Santander upped new mortgage rates by as much as 0.43% yesterday and Coventry Building Society will increase its two, three and five-year deals today.

Industry experts Moneyfacts said the average two-year fixed rate on a £200,000 mortgage over a 25-year term is now 5.64%, up from 5.34% before last month’s inflation data.

The increase has added another £35 a month to the average repayments for those taking a new deal.

The jump in rates is forcing borrowers to lumber themselves with longer agreements.

Trade body UK Finance said a record one in five first-time buyers are signing up to mortgages of more than 35 years.

About 1.5 million borrowers are due to come off an existing fixed rate deal this year, and face a real shock.

Sarah Coles, head of personal finance at Hargreaves Lansdown, said: “They’ve been shielded from the horror of rate hikes so far by a fixed mortgage, and when their deal runs out, they face the full force of the rises in one single hit.”

Dr Jeevun Sandher, of the New Economics Foundation, added: “We are all still paying the price for the Truss mini-Budget.”

Inflation had also surged because “a decade of under-investment in energy and insulation”, he added.

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