Nationwide has revealed that it plans to raise the cost of its entire fixed-rate mortgage range after recent steep rises in wholesale funding costs.

The group plans to raise fixed-rate deals by an average of 0.2%, with some rising by as much as 0.86%.

Swap rates - which fixed mortgage rates are based on - have increased sharply over the last month.

Last week the cost of two-year swaps saw one of their biggest jumps over the past decade.

It is expected that Nationwide`s announcement will trigger repricing among other mortgage lenders.

Yorkshire Building Society has already increased its fixed rate deals over two, three and five years by between 0.2% and 0.5%.

Meanwhile a number of other smaller lenders have either withdrawn their ranges of the products or repriced them.

Last week the Woolwich - the lending arm of Barclays - withdrew its three-year fixed-rate mortgages and increased the cost of its two-year ones by 0.3%.

Ray Boulger, senior technical manager at John Charcol, said: "Nationwide are a big enough lender to cause a general increase in fixed rates. I think it is highly likely we will see other lenders put their rates up in the near future.

"The reason Nationwide have put their rates up is partly because of a sharp rise in swap rates, but I think they are also looking to reduce the amount of lending they do in the short-term."

In addition, there have been significant rises in three and five-year swap rates since May 14, increasing by 0.62% to stand at 3.11% and 3.76% respectively on Monday.

Meanwhile 10-year swap rates are up by 0.44% to 4.24% during the same period.

The biggest increase to the Nationwide range is being made to its five-year fixed rate loan for new customers remortgaging, who are borrowing up to 60% of their home's value and pay a £995 fee.

The cost of the deal is being increased by 0.86% to 5.84% from Friday June 12.

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