Mortgage rate rise adds to the misery
September 25th, 2008UK Homeowners will be forced to find another £450 a year as UK lending giants rush to push up their home mortgage rates
UK Banks and building societies are raising their fixed rates, with some deals being increased by up to 0.5 percentage points.
UK Lenders blame the soaring cost of borrowing, which has been triggered by the unprecedented collapse in confidence following last week’s economic turmoil in Britain and the US.
Last week, the swap rate - which dictates lenders’ fixed rates - was just 5.2%. Yesterday, it had soared to 5.54%.
For lenders who cannot borrow money as easily or as cheaply as they once did, the only option is to raise rates and - possibly - mortgage fees.
Today Woolwich, which is owned by Barclays, becomes the latest lender to make its fixed mortgage deals more expensive. Last night, Skipton Building Society took the axe to its entire fixed range, a signal that the new deals are likely to be dearer.
HSBC its subsidiary First Direct and Yorkshire Building Society were the first to make the move.
At Yorkshire, a top 15 lender, some deals have increased twice this week, while one for first-time buyers has shot up 0.5 percentage points.
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