Your starter for ten. When was the average interest rate on newly drawn mortgages last above 5%?
The answer is almost exactly 15 year ago in November 2008, half a generation ago. For the past seven years it has bounced along at around the 2% mark, hitting a historic low of 1.5% in November 2021. What a different world that was.
Since then the cost of taking out a mortgage has rocketed at a remarkable rate.
Today’s figure from the Bank show that they breached the 5% mark - 5.01% to be precise, in September.
It has been a dizzying ascent in the cost of borrowing, a more than three fold rise in just two years, that is probably without parallel.
It would not feel so punitive on young buyers if prices had come down to meet them halfway. But they have not, at least not significantly.
Latest figures from the Land Registry show the average price of a home in London stood at £535,597 in August, only a whisker down from the £543,597 all time high recorded in August 2022.
No wonder, as our lead story reveals today, desperate young buyers increasingly are having to resort to ultra-long terms on their mortgages - 35 years or more - that will leave many still laden with debt into their retirement just to clamber on the ladder.
It is an echo of the Japanese life-time mortgages that we used to laugh at in this country.
With luck the rise in rates on new mortgages has topped out with the pause in the Bank of England’s monetary tightening. Just don’t expect it to fall far anytime soon.
