Average mortgage rates have continued to rise as they near 6% for a two-year fixed deal – while the number of products available has dropped again.

The average rate on a new two-year now stands at 5.86%, up from 5.72% a week ago, 5.33% a month ago.

Meanwhile a five-year deal stood at an average of 5.51% yesterday, up from 5.41% a week ago, and 5.03% month-on-month.

The data provided by Moneyfacts also revealed the number of mortgage products available currently stands at 4,952, falling from 5,056 last Friday, and down from 5,300 a month ago.

It comes as City experts today warned of a “big reset of mortgages”, with just a third of borrowers on cheap fixed-term deals having come off them so far.

Mortgage rates have soared in recent weeks, following the release of worse-than-expected inflation figures last month that put the annual rate at 8.7%.

Traders are pricing in a rise in the Bank of England’s base rate to 5.5% by the end of this year. It is currently at 4.5%, with the next update due on 22 June.

As rising interest rates and high inflation wreak havoc, Moneyfacts reported that mortgage providers have also pulled a swathe of ten-year fixed-rate deals.

The rise in mortgage rates is set to cost borrowers £9bn over this year and next, according to the Centre for Economics and Business Research.

And the Financial Conduct Authority has reported that around 116,000 borrowers are due to come off fixed rate deals this month.

David Hollingworth, associate director at broker L&C Mortgages, told BBC Radio 4’s Today programme : ‘It’s been pretty relentless for the last couple of weeks in terms of the pace of change in rates. And anything that has been withdrawn has largely been replaced with something higher.”

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