Mortgage rates are continuing to increase despite new chancellor Jeremy Hunt reversing much of his predecessor’s disastrous mini-Budget.

While the announcement saw government borrowing costs go down, the fall in interest rates on bonds and gilts did not pass on to mortgage deals.

It had been hoped Hunt’s reversals of Kwasi Kwarteng’s plans would bring the high mortgage deals down but instead they have continued to rise.

The average rate on a two-year fix has risen from 4.74% last month to 6.53% on Tuesday, Moneyfacts said.

It is equivalent to adding more than £220 a month to a £200,000 mortgage and is the highest it has been since 2008.

Eleanor Williams, finance expert at Moneyfacts.co.uk, said the mortgage sector “remains volatile”.

She said the number of mortgage deals available was going up and down “as lenders tweak their offerings, and interest rates continue to climb”.

NatWest has increased its five-year fix for buyers from 5.97% to 6.39%.

First-time would-be homeowners are also looking at two-year rates from the bank as high as 6.54%.

TSB is offering five-years at 6.49% and two-years at 6.79%.

These rates, typical of what is now available on the market, exclude the arrangement fees being charged by the lenders.