HIGH street bank bosses have been summoned to crisis talks with Chancellor Kwasi Kwarteng.
It comes as homeowners face the biggest increase in mortgage costs for 14 years.
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The average rate on a two-year fixed mortgage has surged to 6.07 per cent — the first time it averaged more than six per cent since 2008.
Mr Kwarteng is calling in bank bosses after more than 1,000 mortgage products were pulled by lenders over the past week.
The products were withdrawn on the back of market turmoil in government bonds, which made it almost impossible for banks to price their products against.
The market chaos was in part sparked by concerns about a surge in borrowing and unfunded tax cuts in last month’s mini-Budget.
Critics dubbed the knock-on impact as the “Kwarteng premium”.
Bosses from Barclays, NatWest and Lloyds Banking Group are expected to attend the meeting, according to Sky News.
The financial watchdog has recently called for banks to justify the withdrawal of their rates.
The jump to 6.07 per cent — compared to an average of 2.34 per cent last year — means homeowners with a £200,000 mortgage over 25 years will face paying an extra £416 a month, or nearly £5,000 a year, compared to last year.
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And the same deal will be £78 more than if a borrower was able to secure a mortgage just five days ago.
Homeowners with a five-year fixed mortgage are also facing a 5.97 per cent interest rate rise, meaning a £373 increase compared to last year, according to Moneyfacts.co.uk.
Rachel Springall, from the firm, said: “Borrowers may well be concerned about the rise to fixed mortgage rates but it is essential they seek advice to assess the deals available to them right now.”
