Abbey raises its mortgage rates
Updated on 07 October 2008
Abbey announced it was increasing some of its mortgage rates following recent changes made by its competitors.
The group is raising the cost of its two and three-year fixed-rate mortgages by up to 0.15%.
Abbey blamed the move on decisions by its competitors to increase their rates, with Halifax, Nationwide and Lloyds TSB's mortgage arm Cheltenham & Gloucester all raising their rates in the past week.
The change, which comes into force from Wednesday, will leave a two-year fixed-rate mortgage for someone with a 25% deposit who pays arrangement fees of £549 at 6.04%.
An increase of 0.15% adds around £14 to monthly repayments on a typical £150,000 mortgage, or £168 a year.
Abbey also said it was reducing rates on its five-year fixed rate mortgage by 0.1% for people borrowing 75% of their home's value, it is also slashing fees on the product from £1,499 to £995.
Mortgage rates have begun rising again in recent weeks due to a jump in wholesale funding costs.
However, homeowners could receive some better news on Thursday as the Bank of England's Monetary Policy Committee is widely expected to cut interest rates for the first time since April.
Most commentators expect it to cut the official cost of borrowing by 0.25% to 4.75%, although many have said a 0.5% reduction cannot be ruled out.
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