Falls in mortgage rates could come to “an abrupt halt”, according to brokers, with expectations that home loan costs may rise in the coming days.

Lenders have been locked in intense competition for borrowers in recent weeks, which has led to consistent falls in the interest rates charged on new fixed mortgage deals.

This has led to more activity among buyers and sellers in the UK housing market.

But one lender, the Coventry Building Society, is putting up mortgage rates on Friday, and others are expected to follow suit in the coming days.

“The mortgage market has seen rates falling in recent months but that may be coming to an abrupt halt,” said David Hollingworth, associate director at broker L&C Mortgages.

About 1.6 million existing borrowers had relatively cheap fixed-rate deals expiring this year. Hundreds of thousands of potential first-time buyers have been hoping to get a place of their own with their first mortgage. All would welcome low mortgage rates.

The interest rate on a fixed mortgage does not change until the deal expires, usually after two or five years, and a new one is chosen to replace it.

Someone getting a mortgage a year ago, and able to offer a 40% deposit, faced an average interest rate on a two-year fixed deal of 6.16%.

However, by October this year, the average rate had dropped to 4.84%, according to financial information service Moneyfacts.

The reduction is the result of competition between lenders, and the Bank of England making its first cut in the benchmark interest rate for four years in July.

As a result, demand from property buyers, sales, and the number of homes newly-listed for sale rose in September, according to the latest report from the Royal Institution of Chartered Surveyors (RICS).

However, housing experts are predicting that some lenders may now start putting up mortgage rates, perhaps as early as next week.

Some lenders, as seen with an announcement by Barclays, could raise rates on some deals, while still cut rates on others.

So-called swap rates, which influence the price of fixed-rate mortgage deals, have been rising in recent days.

“This is a reminder that things can change,” said Mr Hollingworth.

“It isn’t a cause for panic but those that have been tempted to wait for lower rates may want to consider locking into a deal in case we see further increases. If expectation eases again it’s still possible to review rates.”

Mortgage customers and house-hunters will hope any mortgage rate increases are small and short-lived.

Analysts say the increase in swap rates could have been caused by a number of reasons, including potential announcements in the upcoming Budget, comments from Bank of England policymakers over the direction of rates, and international tensions.

However, in general the medium-term direction of interest rates is still expected to be down.

“There is a lot of concern about the upcoming Budget so once it has been announced we could see the money market settle down again,” said Aaron Strutt, of broker Trinity Financial.

In the meantime, those hoping to be first-time buyers face a triple-whammy if mortgage rates start to rise again, house prices go up, and rents get more expensive.

Fears among some landlords about stricter tax rules in the Budget, as well as greater protection for renters, have led some to sell up, according to Rics. Fewer homes for rent could mean higher costs for tenants.

“Demand is consistently outstripping supply,” said the president of Rics, Tina Paillet.

“While the Renters’ Rights Bill aims to improve standards and offer better protections for tenants, we must ensure that these reforms do not discourage responsible landlords from remaining in the market.”

• Make overpayments. If you still have some time on a low fixed-rate deal, you might be able to pay more now to save later.
• Move to an interest-only mortgage. It can keep your monthly payments affordable although you won’t be paying off the debt accrued when purchasing your house.
• Extend the life of your mortgage. The typical mortgage term is 25 years, but 30 and even 40-year terms are now available.

Read more here.