The cost of mortgages has jumped in the past week, according to Defaqto.

The financial information firm found that sub-1% mortgages have all but disappeared in the space of a week as lenders hike their rates in anticipation of a rise in the Bank of England Base Rate.

It said that on Monday 25th October, there were 82 sub-1% fixed rate mortgages available at 0.84% to 0.99%, but these have almost disappeared and there are now only 22 fixed rate products with a rate less than 1%.

Rise in cost of homeloans for first-time buyers

First-time buyer mortgages up to 95% of the property’s value for those with small deposits have seen big increases too.

Last week the average rate for a two-year fixed first-time buyer mortgage at 95% loan-to-value was 2.45% but this has jumped in a week to 2.69%, adding £24 to a monthly repayment for someone with a £200,000 mortgage.

There have been even larger rises for borrowers with more substantial deposits of 20% of the property’s value. Those who need a mortgage at 80% of the property’s value have seen the best available rate soar from 1.24% for a two-year fixed product last week up to 1.64% today.

Katie Brain, consumer banking expert at Defaqto, said: “We have enjoyed record low interest rates for a long-time and they had to start going back up at some point. For anyone who needs a mortgage, there is never a good time for this. However, interest rates are still very low compared to previous years and there are still some great deals to be had.

“Sometimes any saving on the headline interest rate can be wiped out by expensive fees and you need to know what the cost is over the whole period you are tied in for. It is always worth getting independent advice from a professional who can advise you on the right product for your needs.”