Hard-pressed homeowners continued to face big rises in mortgage costs last month, in spite of the April 10 cut in base rates, according to figures yesterday from the Bank of England which point to continued weakening of the UK housing market.

The Bank's figures show the typical interest rate on a new, two-year, 95% loan-to-value mortgage jumped by 0.34 percentage points to 6.94% between March and April.

This was the highest rate charged by banks and building societies on such loans since February 2000. It was also nearly two percentage points higher than the base rate of 5% which has prevailed since April 10's quarter-point cut.

The Bank has cut UK base rates by a quarter-point three times so far this cycle, with the other reductions coming in December and February.

The typical interest rate on a two-year, 75% loan-to-value mortgage rose by a smaller amount than that on the 95% product. The 6.08% to which this rate climbed in April was the highest since last November.

The typical standard variable rate was unchanged between March and April at 7.24%.

Banks and building societies have in recent months been hiking mortgage interest rates in response to the dramatic tightening in wholesale credit markets since last summer - stemming from massive default on sub-prime mortgages in the US.

The Bank of England last month moved to tackle the surge in sterling interbank lending rates with a £50bn-plus programme to allow banks to swap mortgage-backed securities, which are difficult or impossible to trade, for Treasury bills.

Interbank lending markets loosened in the run-up to this announcement from the Bank, and this trend has continued, but it remains to be seen whether this feeds through significantly to mortgage rates.