Buyers looking for a fixed-rate homeowner loan will have to pay a premium for it as mortgage rates reach a ten-year high, according to Moneyfacts.

The average two-year fixed-rate has hit 6.75 per cent - the highest in a decade - and things are likely to get worse before they get better, said the independent financial advice site.

And it''s not just fixed-rate mortgages that have seen a hike, swap rates are up to 6.49 per cent as lenders are being forced to pay more for the funds they pass on to borrowers.

A spokesperson for Moneyfacts said: "Many borrowers prefer fixed-rate deals, particularly in today''s economic climate as they struggle to keep outgoings under control.

"However, many are likely to find this increased cost too much to bear."

Some banks are offering rates below six per cent and if the Bank of England keeps the base rate at its current level, or drops it below five per cent, standard variable rates may start to improve.

Many experts expected the bank to drop interest this month, but the Bank said controlling inflation was its biggest concern.