It has been revealed that the biggest mortgage lenders throughout the UK are to increase their costs on fixed rate mortgage deals following a sudden rise in wholesale funding costs.

Several banks are increasing selected fixed rate mortgages between 0.5% and 0.7% points. This new development comes just days after Nationwide announced that it was increasing rates on all their fixed rate mortgage products.

However, the main reason for the charges is to because of the rising costs of swap rates. These are the fixed rates at which banks and building societies loan money from each other, to fund these particular deals.

“Swap rates have increased substantially in May and June and in particular last week,” said Nici Audhlam-Gardiner, director of mortgages for one of the banks.

As a result, some suggest it may now be a good time to fix the cost of a home loan. Melanie Bien, a mortgage broker from a finance firm said: “People thinking of taking out a fixed-rate should not delay, but should move as quickly as possible. I think rates will go higher still.”