Halifax raises mortgage rates by 0.5% |
From Wednesday, Halifax will increase one of its two-year fixed mortgage rate product from 6.09 per cent to 6.59 per cent, adding £46 a month to borrowers' repayments on a £150,000 loan.
On a two-year tracker, the rate will increase from 1.49 per cent above base rate to 1.99 per cent to give a current rate of 6.99 per cent.
Halifax is increasing its rates despite an appeal from Chancellor Alistair Darling for banks to help Britain’s worsening mortgage market in return for more help from the Government.
As well as the Bank of England's Monetary Policy Committee cutting the interest rate for the second time this year from 5.25 per cent to 5 per cent, it also pumped in an extra £5 billion into the banking system today. This brought the total cash injection to £15 billion which is aimed at helping cut the rate banks charge to lend to each other which in turn influences how much lenders charge customers.
Mr. Darling said yesterday: "We know this is a difficult time. We've got to get through it and we can get through it. What we are saying is: we are helping the banks; the banks have got to help people as well."
However, last week's interest rate cut has made little difference to the current mortgage situation with only few of lenders passing on the cut on their standard variable rate deals and several, including Nationwide, Alliance & Leicester and Britannia increasing rates instead.
Brokers said that Halifax's decision could sound the death for the popular two-year fixed rate deal, sending out a signal that the lender wants borrowers to commit to a longer term mortgage.
One mortgage expert said: "A jump in interest rate of this size means Halifax is pricing them out of the two year mortgage market — they clearly don't want the business."
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Added on 16/04/2008 18:43:12
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