A fresh wave of increases to mortgage interest rates by Britain's biggest mortgage lenders is set to hit hundreds of thousands of homeowners and buy-to-let landlords.

Cheltenham & Gloucester, the mortgage brand owned by Lloyds Banking Group, increased its residential and buy-to-let deals by up to 0.3 percentage points today. A three-year fix for borrowers with a 25 per cent deposit has risen to 5.59 per cent.

Northern Rock has also raised its five-year fixes and buy-to-let deals by up to 0.2 percentage points today. The Principality building society is also pushing up costs of its fixed rates mortgages while The Nottingham has withdrawing deals this weekend and is likely to raise mortgage rates next week.

On Wednesday, Times Online revealed that Nationwide Building Society, Britain's third biggest lender, was putting up rates by up to 0.86 percentage points today, the biggest hike in mortgage rates for months. A five-year fix has jumped from 4.78 per cent to 5.64 per cent. It blamed moves by rival lenders and a sharp rise in whole borrowing costs for the decision.

Ray Boulger, senior technical manager of John Charcol, the broker, said he expected the rest of the Lloyds Banking Group brands, including Halifax, Britain's biggest lender, to increase their fixed rates at the weekend, in some cases by quite large amounts, although no other changes have as yet been confirmed.

Homeowners are in a race to fix on to an attractive rate before mortgage costs rise over the coming months. Around seven out of ten new home loans are fixed-rate mortgages, according to the Council of Mortgage Lenders (CML).

Borrowers fear that interest rates have no where to go but upwards - from the current historically low level of 0.5 per cent - and are keen to lock into longer-term fixed rate deals now.

Economists agree that the Bank of England is likely to have to raise rates later this year or next year to control inflation, which could return when the economy recovers.

The expectation that rates will rise in the future is the main factor pushing up the cost to banks and building societies of wholesale borrowing on moneymarkets, which they use to fund new mortgage lending. Swap rates have climbed steeply in the last fortnight, which lenders say they are being passed onto homeowners in the form of more expensive home loans.

However, the margin between swaps and the price that borrowers pay for a mortgage has doubled in the last year, according to figures from Moneyfacts.co.uk, the financial website.

It said that the margin between the average two-year fixed rate and the swap rate is currently of 2.27 per cent, compared to 0.82 per cent last year.

Simon Ward, chief economist for Henderson New Star, said: "The rise in swap rates has certainly cut off the decline in mortgage rates but the gap between swaps and mortgage rates remains historically very wide and there should be scope for lenders to absorb these rises in swap rates for the time being."

The CML reported that banks and building societies granted 16 per cent more home loans in April than in March. The loans totalled £4.5 billion — which was also up 16 per cent on the total for March — although the total value was down 40 per cent on April last year.

Louise Cuming, head of mortgages at moneysupermarket.com, said: “Borrowers looking to fix should lock in quickly, before the next tranche of mortgage products come through showing drastically increased rates."