Mortgage rates are likely to start rising from next year and worried homeowners should fix now to protect themselves.
The property market recovery looks set to accelerate, with the Office for Budget Responsibility revising its five-year growth, saying that house prices will be 10% higher than previously expected by 2018.
By 2015, house prices will be rising by 7.2% a year, it said.
With unemployment also improving faster than expected, that first base rate hike is looming closer.
But mortgage rates will rise well before then, said Simon Gammon, managing partner of Knight Frank Finance. "Mark Carney has already predicted the Bank of England base rate will rise in 2016 or earlier if conditions allow.
"Factoring in this impending rise, I expect mortgage rates will start to move upwards in 2014 as the money markets increasingly price in a bank rate rise.
"Swap rates, the institutional money market rates that partly determine the cost of fixed-rate loans, will start to price in a rate rise long before it materialises, so fixed and variable rates could start to increase more than a year ahead of an actual movement in the base rate.
"Now is a very good time to review your mortgage plans in preparation for a base rate rise."
Expectations are growing that the unemployment figure will breach Carney's 7% target in 2015, said Mark Harris, chief executive of mortgage broker SPF Private Clients.
But this doesn't mean rates will automatically rise. "The Bank of England has already been quick to clarify that the 7% target is a threshold rather than a trigger for rate rises.
'While unemployment is falling faster than previously predicted, we are not seeing consistently reliable data on this. There could be ups and downs along the way before the target is reached, so it may well be pushed back beyond 2015.
"All borrowers can do is not panic that interest rates will rise sooner rather than later. Keep an eye on your mortgage and opt for a five-year fix if you are worried about interest rate rises in the short term.'
Liam Bailey, head of Knight Frank Global Research, said the future for the housing market looks positive. "Critically, in terms of the health of the market, the OBR has revised its view of housing transactions, with a 12% upwards revision for both of the next two fiscal years.
"This growth is undoubtedly based on an assumption that the current market recovery will continue to spread into the midlands and northern regions.”
Osborne also announced yesterday that challenger banks Virgin and Aldermore would join the Help to Buy scheme, boosting the number of 95% LTV mortgages available under the Help to Buy scheme
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