Halifax increases rates for new borrowers
July 20, 2008
The Halifax has increased its interest rates on mortgages for new borrowers after making alterations to interest rates for the twentieth time since the start of the year. Over twenty of its mortgage products will see rates rise by up to 0.5%, and this is despite the fact that the base rate has fallen three times since December and has stayed static at 5% over the past couple of months.
An official from the Halifax said: “Over the past few weeks, most major lenders have increased their pricing on a number of occasions. Wholesale money is very expensive. In addition, swap rates have moved up in recent weeks – that means that fixed rates have become more expensive. Unfortunately, these increased costs have to be passed on to new customers by banks and building societies. Pricing is going up in just five out of 32 within the tracker range, and within the fixed range over half remain unchanged.”
Both fixed and tracker mortgages have been affected by the rate rises, which take effect for new borrowers from this week. Other lenders may swiftly follow suit in light of some predictions that the base rate may rise later this year because of soaring inflation levels. Some lenders, including First Direct, which is the Internet arm of HSBC, have already increased rates on some mortgage products.
In light of the situation and uncertainty over the base rate some industry officials are urgings consumers to start looking for affordable deals as early on as possible before further rate rises are introduced by various other lenders. Another report has shown that many are confused over which mortgage type of choose given the varied predictions over interest rate movement over the course of this year.
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