UK mortgages: average rate on a two-year fixed deal soars to nearly 6%

Government's 45p tax U-turn and calmer stock markets do not result in cheaper new mortgage deals

The average rate on a two-year fixed mortgage has jumped to just under 6%, according to data released on Tuesday, dashing hopes that government efforts to calm the financial markets might ease the cost of home loans.

Amid warnings from brokers that 95% mortgages could be the next casualty of the financial uncertainty triggered by Kwasi Kwarteng's mini-budget, research firm Moneyfacts said the average new two-year fixed rate jumped to 5.97% on Tuesday, having already risen to 5.75% on Monday.