Borrowers should brace themselves for a wave of steep mortgage rate increases over the next few days as all the main lenders are expected to raise the cost of loans.
Sharlene Goff, FT.com – 12 June 2009
“There is no question that fixed rates will go up,” said Ray Boulger, senior technical manager at John Charcol. “I would be surprised if any of the main lenders did not put rates up over the next week.”
Fixed mortgage rates have been rising for the past few weeks as banks have had to pay more for funds, even though the base interest rate has stayed low. But a sudden jump in swap rates – which determine the cost of fixed-rate lending – has accelerated the trend.
Nationwide Building Society yesterday increased rates by as much as 0.86 per cent, one of the sharpest rises in at least a year. Its popular five-year rate, which is only available to borrowers with a deposit of 40 per cent, has risen from 4.98 per cent to 5.84 per cent. Yorkshire Building Society and Northern Rock have also increased rates.
