The price of an average fixed-rate mortgage deal has hit its highest level in 10 years as lenders pass on rapidly rising borrowing costs.

The average new two-year fixed rate reached 6.75 per cent yesterday, according to data from Moneyfacts.co.uk, the price comparison website. Longer-term fixed deals have also become considerably more expensive, with the average five-year rate rising to 6.72 per cent.