Two of the country’s biggest lenders have pull their fixed rate deals.

Halifax has today hiked the rate on its top two-year fix from 5.49 per cent to 5.79 per cent, while Abbey’s deal has broken the 6 per cent barrier, rising from 5.99 per cent to 6.19 per cent last week.

Louise Cuming, head of mortgages at Moneysupermarket.com, a comparison site, said: “Borrowers needing the stability of a fixed rate product should reserve their next deal now if their mortgage term is coming to an end. Fixed rates appear to be going up – and fast.”

Fixed rates have been going up because the City expects the Bank of England to raise rates by another quarter point to 5.75 per cent this summer – possibly at next week’s meeting – and some commentators think they could even hit 6 per cent before the year is out.

Interest rates have already gone up four times in the past ten months from 4.5 per cent to 5.5 per cent, adding £166 a month to a £200,000 interest-only mortgage.

More than 800,000 borrowers face a £1 billion ‘payment shock’ in the coming months when fixed rates they took out two years ago end.

In summer 2005 the best fix was at 4.15 per cent but now borrowers will struggle to find fixes below 5 per cent.

George Buckley, chief UK economist at Deutsche Bank, said: “Homebuyers are in for a shock when their deals come to an end. Two years ago fixed rates offered outstanding value and the number taken out ballooned. Fixes are now around 1.1 percentage points higher than they were then, and are likely to rise further still.”

“The sharp rise in payments faced by borrowers will almost certainly put downward pressure on house price inflation and could also slow consumer spending as households struggle to absorb the extra costs”.

Portman has a two-year fix at 5.29 per cent with a £1,499 fee. You must have a 5 per cent deposit. Meanwhile, Stroud & Swindon has a five-year deal at 5.59 per cent, while Newcastle has a ten-year scheme at just 5.5 per cent.

Cuming said: “Borrowers may not be aware they can reserve a mortgage at the current rate for up to six months.”