» Click here for the original article

It's crunch time – funding is becoming more expensive as the economy grows in confidence and the cheap fixed rates on the market are coming to an end – it's time to act now and get locked in.

Fixed rate mortgages have been falling for nearly two years, but moneysupermarket.com warns they are about to start creeping up again.

The tumbling Bank of England base rate has meant mortgages fixed over two and three years gradually fell from August 2007. However, with the markets predicting the base rate will begin to creep up again as the economy recovers; lenders are likely to look to increase the rates on their fixed rate products.

In August 2007, the average best two-year fixed mortgage was just 5.73%, but by June 1 of this year that had fallen to 3.56%. Now, just two weeks on that has risen slightly to 3.62%, evidence that the bottom may have been reached. Three year fixes have yet to increase, down to 4.09% from August 2008's 6.42%, but they have been slowing down and a rise next month will not be a surprise.

Louise Cuming, head of mortgages at moneysupermarket.com, says: "For a while now many people have been waiting to pounce once we reach the bottom of the mortgage market, it seems that time has come.

"The possibility of a rising rate means banks will be charging each other that little bit more for credit, and they are unlikely to let consumers continue to enjoy lower rates for long. Our data shows this is already affecting two year fixed rate deals, which have risen slightly over the last six months.

"Borrowers looking to fix should lock in quickly, before the next tranche of mortgage products come through showing drastically increased rates. Borrowers might also consider fixing for a longer period of time, say up to five years. If the base rate climbs back to mid 2008 levels, fixed rate deals might be going up for some time."

SOURCE: Moneysupermarket.com, 12/06/09

To keep up with the latest news and comments on the mortgage market please visit the Mortgage Broker Blog.