David Grundy, CEO of My Online Estate Agent, comments on why mortgage rates will increase regardless of an interest Rate rise and how households can prepare for the hike:

“The Bank of England governor Mark Carney has been clear that record low interest rates will soon start to increase, and despite the exact timing still being unclear, lenders are already starting to axe their cheapest fixed rates in preparation for a rate rise.

“Barclays, Santander and Yorkshire Building Society have become the first to withdraw their cheapest deals from the market, and we can expect a domino effect to follow with many of the other best deals starting to disappear.

“Although much of the talk predicts interest rate rises towards the end of this year, I would be surprised to see any real movement until at least 2016. But, the fact lenders are starting to withdraw their cheapest deals now shows interest rates are not the only driving force pushing rates up. The fact is mortgages have hit rock bottom, interest rates have seen no movement in six years and there is nowhere for them to go but up.

“On the bright side however, there are still some amazing fixed rates on the market, such as Chelsea Building Society and Tesco Bank who are currently topping the best buys chart. If you are on a variable rate and think you would struggle to meet higher repayments now is the time to grab them before they’re gone.

“This is particular relevance to first-timer buyers who’ve purchased their property during the past six years and as such have never experienced a mortgage increase. First timers need to carefully calculate their repayments to make sure they can handle an interest rate hike, bearing in mind that once rates start to rise there is only one way for them to go, meaning over the longer term we can expect to see more increases. Fixing may mean slightly higher payments now, but will provide more security in the long-term.

“But, before you jump into the first cheap fixed-rate you find, make sure you check it’s the right deal for you. Five-year fixes are very popular, but don’t commit to this term if there is a chance you might move in two or three years, as it could potentially leave you with a hefty penalty to pay. Also, check carefully that there aren’t any hidden charges, people often focus on the headline interest rate and not the overall deal – it is critical to ensure you compare the all-in cost of mortgage deals.

“Mortgage rates are undoubtable on the up, so don’t just assume you’re on the best deal, now is the time to check. Some of the current standard variable rates can be expensive and with potential rate hikes on the horizon, fixed rates may work out cheaper for you in the long-term. If you’re already on a fixed rate that is coming to an end next year, talk to your current mortgage provider as they may be able to help secure you an on-going deal. Plan your finances now and you’ll be well prepared for the long-anticipated mortgage hikes which are just around the corner”