Mortgage costs to rise despite rate cut
The Bank of England may have reduced interest rates to five per cent last week, but prospective homeowners will take little solace in the fact that mortgage rates are continuing to rise.
According to the Fair Investment Company, a slew of high street mortgage lenders have upped the rates on their fixed-rate mortgage products, which risks undermining the government's attempts to get a hold on the economy by freeing up household incomes.
In the last two weeks Nationwide, the UK's second largest mortgage lender, has increased some of its fixed rate products by as much as 0.32 per cent, while Alliance and Leicester has increased rates on one of its popular fixed loans from 4.99 per cent to 5.74 per cent since April 7th.
Meanwhile, Halifax, the nation's biggest mortgage lender, has increased rates on its short-term fixed rate deals by up to 0.5 per cent since last week's rate cut.
New homeowners purchasing a Halifax mortgage through an intermediary can expect to pay half a per cent more in interest, while those dealing directly with the bank will be expected to pay 0.35 per cent more on average.
Published 16th April, 2008
© 2008 Estates IT Limited
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The Bank of England may have reduced interest rates to five per cent last week, but prospective homeowners will take little solace in the fact that mortgage rates are continuing to rise.