Mortgage lenders increase rates

Three UK-based lenders have increased the cost of their fixed-rate mortgage loans.

The Co-operative Bank, First Direct and Bradford & Bingley have all made their fixed-rate deals more expensive, which could make property to rent in London and other parts of the country more appealing.

The Co-op has increased the cost of its three-year fixed rate by 0.7 per cent, while its five-year rate is now 0.9 per cent more expensive.

First Direct has put the cost of its two-year fixed deal at 6.15 per cent, up 0.16 per cent.

The cost of fixed-rate residential loans at Bradford & Bingley, meanwhile, has increased by between 0.5 per cent and 0.7 per cent. The lender has also bumped up the cost of its fixed-rate self-certification mortgage rates by 0.95 per cent.

In addition, Bradford & Bingley's lifetime variable mortgage rate has been increased by 0.1 per cent, while its buy-to-let deals have increased by 0.3 per cent.

These increases have occurred because lenders are finding it increasingly difficult to afford the cost of financing loans in the wake of the global credit crunch and with a recession looming in the UK.

Published 26th June, 2008

© 2008 Estates IT Limited