Mortgage rates are going up

Fears very cheap deals are ending

TWO of Britain’s biggest banks have joined a wave of lenders to raise mortgage rates.

Barclays and Rbs-owned Natwest are acting before an expected doubling of the base rate by the Bank of England.

At least 20 firms have raised fixed-rate deals since September 21.

David Hollingworth, of London & Country Mortgages, said: “This is the beginning of the end for very cheap mortgages and will push up outgoings for households when they come to get a new mortgage, adding to higher inflation in general.”

Barclays yesterday increased twoyear fixed-rate mortgages by up to 0.2%. Natwest hiked its two and fiveyear fixed-rate deals by up to 0.9%.

The lender raised 45 fixed-rate deals in total. The biggest jump is on a five-year fixed-rate deal for those remortgaging who need to borrow 85% of the value of their home. The rate has soared from 2.38% to 3.28%.

The rises follow speculation that the Bank of England’s Monetary Policy Committee will double the base rate to 0.5% next month. Barclays said: “The slight increase in rates on part of our product range is due to an increase in the cost of funding.”

The rate hikes came as a shortage of homes for sale fuelled a pick up in house prices last month.

The average property leapt 4% in value year on year, marking the highest figure since a 5.1% increase seen in February, said the Halifax.

The average house price across the UK in September is now £225,109.

STILL RISING House prices