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 New research has suggested that the average cost of a fixed-rate mortgage has hit seven per cent for the first time.
Financial website Moneyfacts.co.uk reported last week that rates had reached 6.75 per cent - the highest figure for ten years - but now new statistics confirm that the average cost of a two-year deal is 7.02 per cent.
In addition, the average rate for a longer five-year fixed-rate product has risen to 6.82 per cent, adding further pressure to anyone approaching the end of their current mortgage deal.
Darren Cook, mortgage expert for the website, said: "This increase is a result of the two-year swap rate reaching 6.52 per cent last week.
"Any increased cost to lenders in arranging the funds on the money market is passed on to customers.
"Lenders are also taking an increased margin on top as they price their products for risk."
The news comes on the back of recent statistics released by the British Bankers' Association (BBA) which showed that mortgage approvals have dropped by 56 per cent over the past 12 months.
Mr Cook added: "More and more borrowers are likely to find the increased repayment too much to bear."
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