Mortgage groups increase rates
Updated on 23 June 2008
Lenders continue to pass on higher borrowing costs to homeowners as two of the UK's biggest mortgage lenders increase their rates.
Halifax, which writes one in every five new mortgages, has raised the cost of half of its fixed rate products by up to 0.5 per cent, while five of its trackers have been increased by 0.3 per cent.
Lloyds TSB has also increased its fixed rate deals, raising them by 0.3 per cent, to give a two-year fixed rate mortgage of 6.44 per cent for people borrowing 75 per cent of their home's value, rising to 6.75 per cent for people borrowing 90 per cent.
Halifax blamed the move on the rising cost of borrowing through the wholesale money markets, with swap rates increasing steeply in recent weeks.
A Halifax spokeswoman said: "Over the past few weeks, most major lenders have increased their pricing on a number of occasions. Wholesale money is very expensive.
"In addition, swap rates have moved up in recent weeks, that means that fixed rates have become more expensive. Unfortunately, these increased costs have to be passed on to new customers by banks and building societies."
The move by the two lenders is part of the latest round of price increases, which saw Nationwide increase its fixed rate loans and some of its trackers by up to 0.5 per cent at the beginning of last week, while Bristol & West hiked its rates by up to 0.75 per cent and the Woolwich increased its lifetime tracker by 0.25 per cent.
Fixed rate mortgage deals have now reached their highest level for ten years, with two-year fixes averaging 6.75 per cent.
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