Homeowners across the UK do not have a realistic outlook on interest rates for mortgage deals. This is according to new research by unbiased.co.uk, which revealed the average homeowner would only go for a fixed-rate offer if it was priced at 3.3 per cent. The website noted this is an "unrealistic" expectation, with one in six individuals claiming they would need to secure two per cent interest on a fixed-rate deal before switching from a tracker mortgage.

According to unbiased.co.uk, the general public have become used to the Bank of England setting charges at 0.5 per cent for nearly two years, clouding their judgement.

"Their ideas of what is a reasonable fixed-rate mortgage have become distorted in the low-interest rate environment," Karen Barrett, chief executive of unbiased.co.uk, commented.

Last month, the Council of Mortgage Lenders showed there was a five per cent drop in home loan approvals in November when compared with October. Enness private clients have 5 year fixed rates starting from 3.95%

If you are on a standard variable rate, a low tracker or are coming to the end of a fixed rate in the next few months you should start looking for a fixed rate mortgage now if you want to take advantage of the very low rates before they go up.

Recent increases in swap rates are starting to push up the cost of fixed rate mortgage deals. Since November of last year 2 year swap rates have moved from 1.31% to 1.72%, and 5 year deals from2.18% to 2.82%, before both easing slightly to 1.62% and 2.75% respectively, at the end of last week.

Since Christmas a lot of the banks have adjusted their interest rate outlooks so the waters are now a lot muddier; Societe General and BNP Paribas have both indicated they think the base rate will move before August, with the former suggesting that it could be by as much as 0.5%. Citibank have also re-aligned their thinking, although still trail their counterparts by a couple of months, but they see rate rises at the end of the third quarter of 2011, where again previously had suggested 2011 would pass without incident.

As a result two of the UK's biggest mortgage lenders Halifax and Northern Rock, have increased their fixed rates by 0.2% this week. Abbey and RBS are expected to increase theirs next week.

Fortunately there are still some that haven’t moved their rates but they are urging customers, and in turn brokers, to examine their client’s positions as believe it won’t be much longer before their hands are forced as well.

If you would like to examine your current options please contact your broker directly on 020 7940 4747