A recent sell-off in bonds has pushed up interest rates along the yield curve, increasing the cost of funding for financial institutions.As a result, fixed term mortgage rates pushed up across the board by between ten and 25 basis points.Warren Shaw, regional general manager of mortgages at National Australia Bank said the recent rise in fixed-interest mortgages is due to economic data in June that surprised the market, causing bond yields to rise over a short period of time.Asked if he thought it would be a short-term spike or if the rise is part of a general upward cycle in interest rates, Shaw said, "I am not sure how much is an over-reaction."John Symond, chairman and chief executive officer at Aussie Home Loans, "believes there has been an over-reaction", in the money market.Symond said, "Swaps, which fund fixed interest rates, have made longer term fixed rates more expensive, and I think they (swap rates) will settle back in a few months time."Chairman of Wizard Home Loans, Mark Bouris, said, "Movements in lenders' fixed rates are largely determined by global bond yields."Fixed rates are based on the yield curve, which looks at the price of money over the next 10 years."Most recently, a large global sell-off in bonds has resulted in many lenders increasing their fixed rates."So are the lenders making more from the increase in rates? Well, not according to Neill McCann, Bank of Queensland's manager home lending. McCann said margins for the bank are the tightest in a decade. "Last time margins were so tight was back in 1997, driven by surplus housing stock which required competitive rates to get buyers into the market."Local Queensland competitor, Suncorp, said rates have appeared to stabilise in a general upward market trend, according to Paul Evans, manager mortgage lending.The official cash rate has not changed since November last year, and with the financial institutions' cost of funding increasing, it seems for now the only direction for interest rates to head is up.