At the begining of May, the average for a two-year fix stood at 5.26% - but as of this morning it's 6.01%, according to Moneyfacts data.
The rapid rate rise will pile more pressure on homeowners who still need to remortgage this year. And with the Bank of England set to hike the base rate for the 13th time later this week, mortgage costs could climb even higher.
Here, Which? delves into why rates are rocketing, how it impacts your mortgage and when rates will start to come down.
Why are mortgage rates rising so fast?
The graph below shows how the average rate for two and five-year fixes has dramatically increased over the past eight weeks, with the sharpest rise coming at the start of June.
Amid the uncertainty, lenders have been repricing their products. This has caused average rates to increase day-by-day, and for the time being, the hikes show little sign of stopping.
Find out more:What will higher rates mean for you?
Those on fixed deals will not feel the effects of the price rises until their existing deal comes to an end.
Data from Moneyfacts shows the contrast between average rates for two-year and five-year fixes in 2021 compared to 2023.
Fixing at a rate of 2.59% (June 2021 average) on a £200,000 loan paid back over a 25-year period would have cost you £906 a month back in 2021.
Over that time you would have paid down that debt and might owe around £188,000, but remortgaging at the current average of 6.01% for the same period would see your bill rise to £1,212 - over 300 a month more.
When will mortgage rates come down?
Without a crystal ball it's impossible to know, but the forecasts point towards more misery to come.
The Resolution Foundation think tank has predicted the average two-year fixed rate deal will hit 6.25% later this year, fueling fears annual mortgage repayments will rise by £2,900 for the average household needing to remortgage next year.
The think tank, which says the UK will face a 'mortgage crunch' next year, doesn't expect the average two-year fix to fall below 4.5% until the end of 2027.
Find out more:What to do if you're struggling to pay your mortgage
Anyone struggling to pay their mortgage should contact their provider as soon as possible.
Ele Clark, Which? Retail Editor, said: 'The first port of call should always be to talk to your lender. This may seem like an intimidating thing to do, but it's important to remember that lenders are obliged to help customers and speaking to them will not affect your credit rating.
Find out more:source https://www.which.co.uk/news/article/average-two-year-fixed-mortgage-rate-now-over-6-when-will-prices-fall-atpK29i5EYAj