Mortgage rates are spiking as five mortgage lenders upped their pricing in the last 24 hours in response to the escalating conflict in Iran.

The typical two-year fix is now 5.54 per cent, according to the rates scrutineer Moneyfacts, up from 5.5 per cent yesterday.

Meanwhile, five-year fixes have climbed to 5.57 per cent, up from 5.52 per cent in 24 hours.

This is the biggest daily jump in mortgage rates since early April, when the conflict in Iran first began. 

Lenders are putting up rates because they fear that the conflict could lead to a fresh inflation spike.

Disruption to the supply of oil and gas in the Strait of Hormuz might drive up energy bills and other household costs.

The uncertainty has already filtered through into government bond yields and swap rates, which banks use to set fixed mortgage costs.

Bad news for homeowners: Fixed mortgage rates are rising on fresh conflict in the Middle East

Santander will increase its rates for home buyers by up to 0.3 basis points from tomorrow, as well as increasing rates for those remortgaging.

It follows increases of up to 0.2 basis points from Barclays, TSB, Halifax and HSBC yesterday.

According to Nicholas Mendes, broker at John Charcol, a 0.2 basis point increase on a typical £200,000 mortgage over 25 years adds around £23 a month, or roughly £276 a year.

On a £300,000 mortgage the same increase adds closer to £35 a month, nearly £420 a year.

You can use This is Money's true cost mortgage calculator to work out how much switching to a new rate would cost you.

He said: 'It's not a dramatic jump on its own, but it's the third or fourth such move in a matter of weeks, and each one stacks on the last for anyone still shopping around.'

Nationwide and Virgin Money were among the first to raise rates last week, as news surfaced about the return to all-out war in the region.

The cheapest fixed rates available, for those with the most equity in their homes, are around 4.3 per cent.

David Stirling, financial adviser at Mint Wealth in Belfast, said: 'Santander joins what is now a full set, with five major lenders raising rates in the space of a day.

'This tells you everything about where the market is heading, at least for now.'

Mortgage rates climbed at the beginning of the conflict in March, but lenders had since been reducing rates steadily for several months as the situation in the Middle East appeared to stabilise.

In the four weeks to 13 July, the average two and five-year fixed rate mortgage fell by 0.16 and 0.11 percentage points respectively and sat at 5.52 per cent, according to Moneyfacts.

Mortgage experts believe rates will be pushed up further in the coming days.

On the up: Barclays is one of the major High Street lenders which has put up rates this week

What should borrowers do?

Those needing to remortgage can usually lock in a rate up to six months before their old one ends.

Therefore, it is a good idea to speak to your lender or a broker now in the event that rates increase further.

If they go down before the new mortgage starts, it is normally possible to switch to another rate.

This is Money's partner L\&C allows you to see mortgage rates from across the market based on your circumstances and get fee-free advice.

Stephen Perkins, managing director at broker Yellow Brick Mortgages, said: 'For borrowers, it’s a reminder that mortgage pricing can change quickly.

'Waiting in the hope of securing a slightly lower rate can sometimes have the opposite effect if market conditions move against you.'

Those who want certainty over their mortgage payments for a longer period might also consider fixing for longer than the usual two or five years.

Most lenders offer ten-year fixed deals, and 15 year mortgages are also increasingly available.

Some specialist lenders will even allow you to fix for the whole term, which could be 25, 30 or even 40 years, though the rates are often higher than average.

However, rates have been volatile over the past few years and it is possible that they could fall again in future, meaning those in long-term fixes could be left paying over the odds.

Most fixed deals come with punitive exit fees if you leave early, so it is important to investigate these if you are considering a longer-term mortgage.

Jamie Elvin, director at London-based Strive Mortgages, said: 'Ten-year fixed rates are unusual for the UK but make sense for borrowers who prioritise payment certainty over flexibility.

'For most people, a well-priced two or five-year fix will still be the more appropriate choice, but the right answer depends on individual circumstances rather than trying to predict the market.'

Mortgage rates have jumped as conflict with Iran has driven up inflation expectations and dashed hopes of interest rate cuts.

If you need a mortgage because you are buying a home, or your current fixed rate deal is due to end, you should explore your options as soon as possible.

This is Money has a long-standing partnership with fee-free broker L\&C, to provide you with expert mortgage advice.

Use This is Money and L\&Cs best mortgage rates calculator to show deals matching your home value, mortgage size, term and fixed rate needs.

Or use L\&C’s online Mortgage Finder to search thousands of deals from more than 90 different lenders to discover the best deal for you.

Mortgage service provided by London \& Country Mortgages (L\&C), which is authorised and regulated by the Financial Conduct Authority (registered number: 143002). The FCA does not regulate most Buy to Let mortgages. Your home or property may be repossessed if you do not keep up repayments on your mortgage