Homeowners urged to fix mortgage now Homeowners stuck on their lenders" standard variable rate (SVR) are being urged to switch to a fixed-mortgage rate now as the gap between the two rates continues to grow. Last week, the Bank of England released its latest house price data, which was hailed as evidence that the housing market is getting stronger. IN Property & Mortgages However the data also revealed an increase in the gap between SVRs and fixed rates. Since the start of the year, the average rates on a two-year fixed rate mortgage with 25 per cent equity or deposit have fallen by 0.63 percentage points to 2.48 per cent. Five-year fixed rates have fallen by 0.34 percentage points over the same period from 3.71 per cent to 3.37 per cent. However, standard variable rates (SVRs) have fallen by just 0.02 percentage points to 4.36 per cent. The gap between fixed-rate mortgages, used to attract new customers, and standard variable rates, often used by existing borrowers when they reach the end of a fixed-rate or tracker mortgage deal, should spur homeowners to move off their bank's SVR, say brokers. Last year, a number of banks including Santander and Co-operative increased their SVRs and one lender, Holmesdale, increased its SVR this month by 0.1 percentage points to 4.99 per cent. The Financial Conduct Authority recently wrote to banks to warn them that they had to treat customers properly when considering further changes. "We recognise that mortgage lenders may want to vary their SVRs or other terms in their contracts, but we are concerned that the factors driving changes to SVRs may not always be transparent to consumers," said the letter. David Hollingworth, a broker at London & Country, says that borrowers need to think carefully about where rates might go next now that the Bank of England's has announced its withdrawal of cheap money for banks in the Funding for Lending Scheme. Rates are likely to drift up a bit now. We've hit the bottom on mortgage rates, so now is a good time to consider fixing. For borrowers who want to fix their mortgage for two years the lowest rate available comes from West Bromwich building society, which is offering 1.48 per cent to borrowers with 40 per cent equity or deposit, although this deal comes with a fee of £2,400. Norwich & Peterborough building society has a more expensive rate, at 1.99 per cent for borrowers who want a 65 per cent loan to value deal, but the fee is far lower at £295. Ray Boulger of mortgage broker John Charcol says that since an SVR is a long-term rate it could make more sense for borrowers to fix for five years instead of two. Yorkshire Building Society has a five-year fix at 2.69 per cent for those with a 35 per cent deposit or equity, which comes with a fee of £1,475. "There is still the same widening gap between SVRs and five year fixes so for those with a good amount of equity they should switch now," he said. However, low levels of remortgaging activity suggests that many borrowers might not have enough equity to move. If this is the case then Mr Boulger recommends waiting. Property prices are still going up and there is a big difference in rates for those with larger amounts of equity so there is an argument for waiting. If your house price increases then you will be able to get a better loan to value deal.