The average two-year fixed rate mortgage has undergone its biggest increase in eight years following the Bank of England’s (BoE) decision to raise interest rates.
Figures from Moneyfacts show the average two-year rate has climbed from its historic low of 2.21 per cent in October to 2.33 per cent in November.
The 0.12 percentage point increase is the biggest monthly rise recorded in the Moneyfacts Treasury Report since August 2009.
It comes after the Bank of England’s Monetary Policy Committee (MPC) voted to increase the base rate from its record low of 0.25 per cent to 0.5 per cent on 2 November.
Meanwhile, the average five-year fixed rate mortgage has also jumped 0.12 percentage points from 2.76 per cent in October to 2.88 per cent in November.
Charlotte Nelson, finance expert at Moneyfacts, said: “The rise in the average two-year fixed rate has essentially wiped out any rate cuts that have occurred in the last six months, seeing the average surpass May 2017 figures.
“With rates on the rise even before the base rate rose, borrowers should use this as a catalyst to sort out their mortgage.
"Any borrower sitting on their standard variable rate or coming to the end of a deal should remortgage as soon as possible to avoid disappointment in a market where rates are rising.”
Daniel Bailey, principal at Derbyshire-based Middleton Finance, said: “Fixed rates have been increasing over the last month in anticipation of the Bank of England increasing rates. Now they have done I think we might possibly see other lenders follow suit.
“When I am seeing clients it is something they are aware of now, and from a broker’s point of view you just have to be aware of it all the time.
"You have got ongoing cases waiting for clients to come back to you, and you can get emails from lenders saying we are withdrawing products and increasing rates.
“You have got to be on the ball, because clients do not want to pay more than they have to. I am trying to point out to clients that we are in a period when fixed rates can potentially increase.”