Halifax raises its mortgage rates
Updated on 03 October 2008
Britain's biggest mortgage lender said it is hiking its mortgage rates for the second time in a week.
Halifax said it was raising its rates by up to 0.25%, following last Friday's increase of up to 0.45%.
The group blamed the move on continued increases in the cost of wholesale funding.
The move leaves a two-year fixed rate deal for someone with a 25% deposit who pays a £999 arrangement fee at 6.05%.
Several major lenders, including Nationwide, Cheltenham & Gloucester and HSBC have announced rate hikes in the past couple of weeks, as the money markets responded to the recent financial turmoil.
Swap rates, upon which fixed-rate mortgages are based, soared by 0.4%, although they have since fallen back to their previous level, while the key inter-bank lending rate three-month Libor rose from a recent low of 5.7% to 6.27% today.
The rate increases by lenders brings to an end the most prolonged period of falling mortgage rates since the credit crunch first struck.
Rates had been steadily falling since July, helping push the average cost of a two-year fixed-rate mortgage down to its pre-credit crunch level, as lenders once again competed for business.
On a brighter note, there are growing expectations that the Bank of England's Monetary Policy Committee will cut interest rates for the first time since April when it meets next week.
Commentators expect the official cost of borrowing to be slashed by 0.25% to 4.75%, although some have said a 0.5% cut cannot be ruled out.
These news feeds are provided by an independent third party and Channel 4 is not responsible or liable to you for the same.
