The average two-year fixed-rate homeowner mortgage was teetering just below the 6% mark on Friday, as lenders continued to hike their rates, according to a financial information website.

Across all deposit sizes, the typical two-year fixed-rate deal jumped from 5.92% on Thursday to sit at 5.98% on Friday, Moneyfactscompare.co.uk said.

Meanwhile, the average five-year fixed-rate mortgage increased from 5.56% on Thursday to 5.62% on Friday.

Mortgage rates previously rocketed amid market turmoil after the mini-Budget in September 2022. Average two and five-year fixed mortgage rates topped 6% last autumn, before later settling down.

By October 20 last year, the average five-year deal was 6.51% and a two-year product was 6.65%.

If average two or five-year fixed rates do top 6% in the coming days, it would be the first time that this has happened this year.

The last time the average two-year fixed-rate mortgage was 6% or more was on December 4 2022 and the last time the average five-year fix was at 6% or above was on November 21 last year, according to Moneyfactscompare.co.uk data, given to the PA news agency.

Rachel Springall, a finance expert at Moneyfactscompare.co.uk said: “Despite lenders such Barclays and TSB having reduced selected fixed-rate mortgages since the start of the week, most fixed-rate changes we’re seeing in the market are still increases.

“Average rates are still around the highest they’ve been so far in 2023, so it will be interesting to see how rates and availability fluctuate in the coming weeks.”

According to Moneyfacts’ figures, 4,923 residential mortgage deals were available on Friday, shrinking back from 5,080 on Thursday.

Ms Springall continued: “Amid interest rate rises, fixing for the longer term may be an attractive choice for those who want peace of mind with their mortgage repayments.

“However, whether now is the time to take out a new deal really will depend on someone’s circumstances, particularly for first-time buyers who may be struggling to build a deposit and who have limited disposable income.

“That said, because of higher house prices, those remortgaging may find they have more equity in their home to drop down into a lower loan-to-value bracket, where more competitive interest rates could be found.”

Richard Donnell, director of research and insight at Zoopla said: “Mortgage rates are rising because of higher-than-expected inflation.”

He continued: “Rising mortgage rates will hit the buying power of new buyers who don’t have a mortgage arranged. Those that have got offers locked in at closer to 4% will most likely push ahead with purchases where they feel secure in their work and/or need to move for job or family reasons.

“Those who were going to move but for less needs-based reasons may look to pull out of deals and wait over the summer.

“For those with a home and re-mortgaging, there will be a jump in mortgage costs as people move from sub-2% or 3% to 5% mortgage rates.

“Some homeowners are injecting cash to pay down debt to reduce loan repayments at higher rates.

“Others may have to look to extend mortgage terms by two to five years to reduce the increase in repayments – this is a solution but comes with the cost of paying more interest to the bank.”

Nationwide Building Society is among many lenders to have increased its rates, with the mutual making rate changes across its fixed-rate mortgage range, effective from Friday. Its rates have increased by up to 0.7 percentage points.

Swap rates, which underpin the pricing of fixed-rate mortgages, have been rising, amid expectations around inflation.

A Nationwide spokesperson said: “With the continued upward trajectory of swap rates in recent times and lenders across the market increasing rates, we are having to make some increases across our fixed-rate mortgage range.

“These changes are in line with the movement in swap rates and ensure that, as a building society, we can continue lending to all types of borrowers.

“Despite the changes in rates, our full mortgage range continues to remain available.”

Amid the mortgage market volatility, some lenders have temporarily withdrawn mortgage availability via brokers in recent days, before putting deals back on sale.

The squeeze on mortgage holders is expected to tighten further next week.

Experts predict the Bank of England will hike interest rates for the 13th time in a row.

Matt Smith, Rightmove’s mortgage expert, said: “It’s been a volatile couple of weeks for the mortgage market and we’ve continued to see average fixed rates creep up this week in both two-year and five-year fixed deals.

“The average rate for a five-year fixed, 85% loan-to-value (LTV) mortgage is now 5.24%, having been 5.20% earlier this week and 5.16% this time last week.

“This equates to a £15 per month increase for someone taking out this kind of mortgage now rather than last week based on the current average asking price for a home. Next week’s inflation figures and Bank of England base rate decision will be really key for setting the tone for the mortgage market over the coming weeks.”

Some analysts are expecting the base rate to rise by another 0.25 percentage points on Thursday, and say there could be more hikes on the horizon.

It would take the rate to 4.75%, helping to drive up the cost of borrowing.

It comes as the Government is under pressure to fulfil its pledge to halve inflation by the end of the year, to 5.4%. Consumer Prices Index (CPI) inflation eased back far less than expected in April, hitting 8.7%.

The Bank of England is “caught between a rock and a hard place, as it has to choose between pushing more mortgage borrowers towards the brink and letting inflation run riot”, according to Laith Khalaf, head of investment analysis at AJ Bell.

The average mortgage holder is looking at a £200 increase in their monthly repayments if their rate goes up by three percentage points.

Myron Jobson, senior personal finance analyst for Interactive Investor, said more “mortgage misery looms” for borrowers set to renew their deal in the second half of this year, “the majority of which were set at interest rates below 2%”.

But the Bank of England has said it will continue to raise interest rates so long as it sees signs of inflationary pressure.

Financial markets are now predicting there to be four further rate hikes, taking it to a peak of 5.75%, analysts said.