Monetary policy makers pushed the base rate up to one per cent last week in a bid to temper inflation.
Lenders have been quick to react, with mortgage rates increasing and expected to climb higher still.
The average two-year fixed rate has now breached three per cent for the first time in seven years, according to Moneyfacts.
Desperate borrowers and busy brokers
Borrowers have become increasingly desperate to grab deals, making life busy for brokers.
Lewis Shaw, founder at Shaw Financial Services, said: “It’s hectic at the moment, to the point I have already blocked out this entire week with no time to turn around.
“However, while rates continue to rise and more people are looking to remortgage, it’s looking as though it won’t stop anytime soon.”
Rhys Schofield, managing director at Peak Mortgages and Protection, added: “Business is absolutely frantic. We’re booked up two weeks in advance at the moment and that’s with working every weekend and evening possible.”
Not just those coming to the end of their fixed-rate term
Imran Hussain, director at Harmony Financial Services, is another broker who has seen a huge jump in his workload.
He said: “I have personally seen a massive increase in enquiries from borrowers who are due to remortgage in the next six months looking to review their options.”
It’s not just clients coming to the end of fixed-rate periods, many borrowers are actively looking to exit their current fixes to grab a deal now, according to Dean Esnard, director at Magni Finance.
He said: “We have seen a huge spike in people looking to remortgage six months before their fixed rate ends. Normally, the majority of borrowers would wait until they are within the last three to four months of their deal and do a simple product transfer.
“However, with rates increasing so quickly, remortgaging before rates increase again can save them thousands of pounds every year.”
Esnard has recently had a client pay a £5,000 early redemption fee to exit a two-year fixed rate in order to lock in a new five-year fixed rate.
He said people are “worried how high rates will be when their current fixed rate expires”.
Matthew Fleming-Duffy, director at Cherry Mortgage and Finance, also said he feels like he is “chasing his tail” at the moment, as clients look for advice despite not being at the end of deals.
He said: “Over 90 per cent of our customers arranging a mortgage in the past two years have opted for fixed rates.
“However, following the recent rate rises, we have certainly seen an influx of enquiries from existing customers looking to review their options many months before the end of their existing deal, which quite honestly makes me feel like I’m chasing my tail a little currently.”