Mortgage blow as top banks push up rates

THE country’s largest mortgage provider and three other major lenders are raising their rates in a fresh blow to borrowers.

Market leader Halifax will increase two and five-year fixed-rate products by up to 0.2 percentage points from tomorrow.

The Co- operative Bank yesterday announced rises of up to 0.72 percentage points across its two, three and five-year fixed-rate deals sold through intermediaries. Its buy-to-let mortgages will increase by up to 1.09 percentage points.

Santander and NatWest also announced they will push up the cost of home loans by up to 0.43 and 0.1 percentage points respectively from today.

The increases will pile further pressure on to Britain’s 1.6million homeowners coming up to remortgage this year.

Justin Moy, managing director at brokers EHF Mortgages, said: ‘This is a bitter blow to borrowers, especially when we are rapidly moving towards the most important time of the year for buying and selling property.’

Mortgage rates began to drop in January in response to falling swap rates, which dictate how much it costs for banks and building societies to lend money to borrowers.

But an uptick in swap rates has prompted lenders to pull and reprice deals.

The average two-year fixed-rate deal is now 5.78 per cent, up from 5.59 per cent last month. Five-year deals have risen from 5.23 per cent to 5.35 per cent in the same period, said analyst MoneyfactsCompare.

But the market still expects the Bank of England to keep base rates at 5.25 per cent, a 16-year high, until June.