UK Edition
Homeowners have seen mortgage costs rise by hundreds of pounds since the Bank of England shocked borrowers with a interest rate increase last month.
The effect of higher rates has now fed through to new fixed-term deals after initially only hitting borrowers on "variable rate" or "tracker" mortgages.
Those remortgaging on a two-year fix deal will pay 0.04 percentage points more than last month, with the average rate up to 2.38pc, according to analyst Moneyfacts. This has added £100 in interest each year on a £250,000 loan. This rises to £160 on a £400,000 mortgage.
The average five-year fix has also increased by 0.02 percentage points to reach 2.66pc, The cost of a two-year fix with a 40pc deposit is now 0.3 percentage points higher than three months ago.
Threadneedle Street surprised markets when it raised the Bank Rate just before Christmas. Millions of borrowers on variable rate and tracker mortgages faced an immediate increase in their loan repayments.
It has taken less than a month for those on fixed-rate deals to feel the same squeeze. The price of two and five-year fixed-rate mortgages have now risen for the third month in a row.
Some borrowers have seen bills rise by significantly more. Earlier this month Nationwide upped rates for its loans by as much as 0.45 percentage points, triple the 0.15 percentage point increase made by the Bank of England when it moved the Bank Rate to 0.25pc from a record-low 0.1pc.
Eleanor Williams, of Moneyfacts, said: "With the potential for the Bank of England to apply further increases to the Bank Rate in the coming months, the cost of borrowing on mortgages will continue to rise."
Households already face a tough “year of the squeeze” with taxes rising in April, energy bills soaring and inflation predicted to hit heights not seen in a generation. "The threat of rising inflation and cost of living crisis on household budgets means more borrowers may be prompted to act sooner than planned in securing a new mortgage deal," Ms Williams added.