The increases are hitting new buyers particularly hard because of the speed at which lenders are changing rates, said Mr Strutt. “People want to take time to think about things, but if they wait a week their mortgage rate could go up by a whole percentage point.”
In one case, a lender increased rates twice in a week.
“A client wanted a five-year fixed-rate buy-to-let mortgage. We quoted 2.79pc, with monthly payments at £580. That rose to 3.19pc and payments of £661.” It means the landlord will pay 69pc more than his current monthly payments of £390.”
Another client saw his quoted monthly mortgage payments jump by £118 because he took two weeks to return a form, Mr Strutt said.
Sarah Coles, of Hargreaves Lansdown, an investment firm, said there was a looming risk for the 1.3 million people coming to the end of fixed-rate deals this year. “Average mortgage rates are the highest we’ve seen since 2013. An awful lot of people are going to find themselves having to stretch their money further,” she said.
Mortgage broker Lewis Shaw, of Shaw Financial Services, said the increased costs could push homeowners to sell up when they came to the end of their fix.
“With the energy price cap forecast to shoot up in October, the cost of fuel at all-time highs and now significant rises in mortgage rates, homeowners are facing a perfect storm,” he said.
Freddie Poser, of campaign group PricedOut, said interest rate rises would widen the gulf between buyers who could afford to pay in cash and those who needed a mortgage.
Rising interest rates have a dramatic effect on the amount of money mortgage borrowers pay their lender over the course of their loan. Of course, rates change over the duration of a mortgage, but to put this in context: if the Bank Rate was 1.25pc for the entirety of an average London buyer’s 25-year mortgage term, assuming this meant a rate of 2.8pc, they would pay a total of £155,329 in interest to their lender.
While a buyer purchasing with cash outright would pay £529,829 for the property, a buyer purchasing with a mortgage (including their 25pc deposit) would ultimately pay £685,158 – 29pc more.
This assumes house prices remain flat over the course of the mortgage. In reality, price growth allows a borrower to gain more equity in their property when they remortgage and therefore qualify for a lower interest rate.
But the figures illustrate how much more exposed mortgaged buyers are than those purchasing in cash.
Homeowners can reduce their bills by overpaying their mortgage, said Mr Strutt. “The sooner you can pay it off, the sooner the costs will be reduced,” he said.