How the annual cost of a mortgage has rocketed by £400 in just four weeks

The annual cost of paying a mortgage has soared by up to £400 in only four weeks, official figures reveal.

For some types of deals, homeowners are now paying the highest interest rate for nearly a decade.

The figures, from the Bank of England, show the full scale of the assault on house buyers who cannot afford to put down a big deposit.

The biggest losers are those taking out a two-year discount mortgage with a deposit of only five per cent.

In February, the average rate was 6.11 per cent. In March, it had shot up to 6.44 per cent, the highest since January 1999. This will add £32 a month, or £384 a year, to the cost of a typical £155,000 repayment mortgage.

The statistics were released as one of the biggest mortgage lenders, Alliance & Leicester, which raised its rates on Tuesday, considers a second increase this week.

A spokesman said: "We look at our pricing daily in terms of what is going on in the rest of the market."

Experts warned that mortgage costs across the board are likely to keep on rising - even if the Bank of England cuts interest rates today.

Despite the base rate falling in February, average mortgage rates have risen for nearly all types of deals.

From today, new fixed-rate deals from the Woolwich, owned by Barclays, will be up to 0.6 percentage points higher than its previous deals.

Last week, you could have got a two-year fixed rate deal of 5.89 per cent if you had a 20 per cent deposit. Today, the rate will be 6.49 per cent.

Ray Boulger, from mortgage brokers John Charcol, said homeowners should expect rates to keep on climbing.

The news comes after banking giant HSBC pledged to match fixed-rate deals ending in the first six months of this year.

Experts predicted it would be "overwhelmed" with inquiries because so many rival lenders have hiked their rates.

But there are catches to the offer. The first is that the fee to take out one of the deals could be up to £5,000.

In addition, the bank is prepared to lend only up to £250,000, which will bar many in the South with massive mortgages. Nor will HSBC match all figures - the "Rate Matcher" offer applies only to deals fixed at 4.54 per cent or above.

The deal is restricted to those with a fixed-rate mortgage running out between January 1 and June 30, who want to fix for another two years.

Any applicant must be seeking no more than 80 per cent of the value of the property and the offer will last from April 14 until May 18. Existing HSBC customers will be "prioritised" during the first week.

The most significant catch is that the deal is no cheaper than some fixed-rate loans already on the market.

With an interest-only mortgage at 4.54 per cent for the maximum of £250,000, the total cost over two years would be £27,700, including the £5,000 fee.

The same loan taken out with the Cheshire Building Society, which has a two-year fixed rate of 5.29 per cent, would cost £27,449, including its £999 fee.

Unlike its rivals, HSBC is not dependent on the money markets to fund its mortgages. Funds handed out to homeowners come almost entirely from the bank's own capital.