1:41pm UK, Friday May 16, 2008

Homeowners refinancing their mortgage face the highest fixed-rates deals since the start of the decade, according to a survey.

New and existing payers to struggle

Figures compiled by personal finance website MoneyFacts and carried in the Daily Telegraph show that the average rate for a two-year loan has hit 6.64% - up from just 4.34% two years ago. 

It means that someone coming to the end of a mortgage on a £150,000 house they took out in 2005, will see their average repayments jump by £206 a month to £1,025.

It is estimated that around 1.4 million homeowners will see their fixed deals expire this year.

MoneyFacts' figures show that someone taking a typical five-year deal in 2003 on a £250,000 home loan will have to stump up almost £500 more when it comes to their new deal.

Typical fixed rates are the highest since 2000, it found.

The new research will come as bad news for first-time buyers, as well as existing homeowners.

Not only are they facing greater repayment costs, but they are also now expected to put down a greater deposit to be approved a mortgage.