Now interest rate on average five-year fixed-rate mortgage is more than 6%

FIVE-YEAR fixed rate mortgage rates have climbed above 6 per cent, piling more pain on borrowers and fuelling claims that banks are ‘profiteering’ as savers remain stuck with meagre returns.

The average rate on five-year deals – at 6.01 per cent – is now the highest since November, according to figures from financial website Moneyfacts. For twoyear deals it reached 6.47 per cent.

Yet savers putting money into an easy access account are on average getting just 2.45 per cent, rising to 4.8 per cent if the cash is locked away for a year. That disparity has prompted the Financial Conduct Authority (FCA) to summon bank chief executives for a showdown at the regulator’s HQ tomorrow.

MPs on the Treasury committee have been probing lenders on the issue for months and yesterday accused them of ‘blatant profiteering’ and failing in their ‘social duty’ to encourage saving.

Chancellor Jeremy Hunt said the FCA had his ‘full backing to ensure banks are passing on better rates as they should be’. Asked whether the banks’ behaviour amounted to profiteering, the Prime Minister’s official spokesman said: ‘It’s something the regulator is looking into.’

The bank’s benchmark interest rate is now 5 per cent, with financial markets betting it will soon hit 6.25 per cent. Sam Richardson at Which? Money said the FCA ‘is right to haul banks in amid claims they are profiteering’, adding: ‘The regulator must take tough action against firms that continue to fall below the required standards of offering fair value products.’