More than a million homeowners face higher monthly mortgage payments as lenders signalled an end to the era of cheap loans that has propped up the property market over the past five years.

Mortgage lenders rushed to introduce more expensive fixed-rate mortgages yesterday to replace those they had hastily withdrawn after last Thursday’s interest rate rise. Mortgage brokers said that more than a million homeonwers were nearing the end of cheap, fixed-term deals and will have to remortgage on worse terms.

Portman Building Society increased its 4.99 per cent two-year fixed rate to 5.34 per cent. Yorkshire Building Society has withdrawn its two-year fixed rate of 4.99 per cent and will replace it with a rate of 5.39 per cent on Friday.

The new fixed rates are 0.4 of a percentage point higher than the best rates available only one week ago. Monthly repayments for a homeowner with a £150,000 loan switching from a best-buy two-year fixed rate of 4.49 per cent taken out in January 2005 to a new rate of 5.34 per cent will rise from £842.12 to £917.37, or £900 a year.

An estimated 100,000 to 150,000 borrowers are expected to come to the end of their cheap fixed-rate deals in the next month, and will face an immediate increase in their monthly payments. Nick Gardner, of Chase De Vere Mortgage Management, said: “This is most unwelcome news for remortgagers and will put extra strain on finances. It could be at least a year before rates start coming down again so they will be stuck with higher costs for the foreseeable future.”

There was more bad news for first-time buyers when the Council of Mortgage Lenders released figures showing that the average property price had risen to a record of 3.29 times the average first-time buyer household income. The figure was 3.27 in October and 2.4 at the start of 2000.

Lenders who had not expected the rate rise began to withdraw popular rates to avoid losing money and desperate borrowers scrabbled around for the few remaining cheap deals.

Yorkshire Building Society said its decision to withdraw fixed rates came after it was swamped by more than 600 applications over the weekend. Portman is believed to have withdrawn its 4.83 per cent two-year fixed rate aimed at borrowers with larger loans because it was worried that demand was too high.

Many lenders are refusing to announce replacement rates until swap rates, the money markets that determine fixed-rate lending, are more stable. Other lenders chose to increase fees on fixed rates instead of withdrawing them altogether. Fees have almost doubled in the past year, from about £499 in January 2006 to £799 today.