Mortgage rates resume upward path
Updated on 19 September 2008
Mortgage rates have resumed their upward path with one lender hiking the cost of its deals by up to 1.6 per cent.
Other lenders are expected to follow suit and raise the cost of their fixed rate and tracker deals next week after a key inter-bank lending rate hit a five month high.
First National, part of GE Money, announced it was raising its rates across the board by 1.6 per cent for people borrowing up to 90 per cent of their home's value and by 0.8 per cent for those borrowing up to 60 per cent.
At the same time iGroup, which is part of the same group, said it was hiking its deals by 1.7 per cent for people borrowing up to 90 per cent of their home's value and by 1.1 per cent for those borrowing up to 60 per cent.
The lenders also announced that anyone who had already submitted a mortgage application would have to pay the new rates unless they could complete their deal by October 3, angering brokers.
The move was blamed on the steep increase in funding costs seen this week amid the global financial turmoil.
Other lenders across the mainstream mortgage market are also expected to raise their rates in the coming fortnight, bringing to an end a period of falls in the cost of home loans, which had seen the average two-year fixed rate deal return to its pre-credit crunch level.
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