A number of lenders are set to increase their fixed mortgage rates next week, particularly for longer-term deals, following a jump in funding costs.

Yorkshire Building Society, which withdrew a number of mortgage rates this week, will raise the price of its five-year deals by up to 0.3 percentage points.

Britannia is also planning to increase sharply its five and 10-year rates, which brokers said would result in the disappearance of a number of market-leading deals.

The main driver behind the increases is a rise in five-year swap rates, which govern the cost of fixed-rate borrowing for banks. Medium and long-term swap rates have risen around 0.2 per cent over the past few days.

But the rate increases are not limited to longer-term deals. Royal Bank of Scotland, which withdrew a number of its fixed rates last night, is also putting up the price of some two-year deals. The new rates will be between 0.1 and 0.7 percentage points higher, with the biggest premium being loaded on to deals for borrowers with smaller deposits. Some of its five-year rates will rise by half a point.

Brokers expect the best new five-year fixed rates would be around 4.5 per cent and many could be nearer to 4.75 per cent.

“This marks a distinct shift in the benchmark products when you consider that five-year rates had dipped slightly below 4 per cent at the end of February,” said David Hollingworth at London & Country Mortgages.