The tumbling Bank of England Base Rate has meant mortgages fixed over two and three years gradually fell from August 2007. However, with the markets predicting the Base Rate will begin to creep up again as the economy recovers; lenders are likely to look to increase the rates on their fixed rate products.

Louise Cuming, head of mortgages at moneysupermarket.com, said: ”For a while now many people have been waiting to pounce once we reach the bottom of the mortgage market, it seems that time has come.

“The rising swap rate means banks will be charging each other that little bit more for credit, and they are unlikely to let consumers continue to enjoy lower rates for long. Our data shows this is already affecting two year fixed rate deals, which have risen slightly over the last six months.

“Borrowers looking to fix should lock in quickly, before the next tranche of mortgage products come through showing drastically increased rates. Borrowers might also consider fixing for a longer period of time, say up to five years. If the Base Rate climbs back to mid 2008 levels, fixed rate deals might be going up for some time.”

By moneysavingsupermarket.com

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