Borrowers are locking into high mortgage rates for five or 10 years, as the cost of arranging two-year deals has jumped and the outlook for short-term rates is uncertain.

Brokers report increased demand for longer-term mortgage deals even though rates are significantly higher than base rate. Some borrowers have been willing to commit to rates of up to 6.5 per cent for five years to gain greater security with their longer-term mortgage payments, and avoid regularly paying high initial fees.