Eurozone chaos hits mortgages
MORTGAGE rates could rise as a result of chaos in the eurozone, according to the Bank of England.
The monetary crisis is pushing up the cost of borrowing for high street banks in the UK and they are set to pass it on to mortgage holders. The Bank of England say average rates on new tracker mortgages have already risen by 0.5 per cent in the eight months to April. “In the absence of falls in funding costs, it suggests that some further increase in mortgage rates is likely as banks seek to restore their margins,” says the Bank of England in its latest inflation report. Some mortgage lenders have already increased standard variable rate loans, though they have offered incentives such as reduced arrangement fees.