Mortgages priced for interest rate rise

Average two-year tracker rates are currently 2.79%, 0.29% higher than in February 2013.

For fixed mortgages meanwhile average rates on 2 and 3-year mortgages noticeably increased compared to last year, with 3.97% for a 3-year fix standing 0.55% lower than in March 2009. A 2-year fix of 3.62% meanwhile is 0.17% point lower than March 2009.

Clare Francis, editor-in-chief at MoneySuperMarket, said: “The low base rate is still good news for borrowers as mortgages continue to look extremely good value. However, they’ve already started to nudge upwards and with interest rate rises seeming likely from next year, homeowners should try and make the most of this whilst they still can.

“Millions of people are currently paying their lender’s SVR and these rates will start rising when base rate goes up, so now is the time to consider moving onto an alternative mortgage. Fixed rate deals are hugely popular at the moment as borrowers seek to protect themselves from rate increases.

“For those with money to spare each month, now is also a good time to overpay on your mortgage. Reducing the size of your debt will be beneficial in the long run when rates go up –which they will.”