Lenders increase mortgage rates
September 14, 2007 by admin
Filed under News, News-Mortgages
Halifax has said that global turmoil in credit markets was to blame for the rise in rates of 20 of its tracker mortgages.
More specifically, the bank explained that there had been a sharp increase in short-term interest rates that banks pay when they lend to each other.
Such mortgages are often financed by banks borrowing money on the international markets yet because of the sub-prime fears in the US availability of lending has slowed dramatically.
Halifax’s announcement of its decision came in the wake of news that Northern Rock had ceased offering sub-prime products, which it had done in partnership with US investment bank Lehman Brothers.
Abbey has also increased the tracked margin above the Bank of England’s base rate for its tracker products.
Halifax’s Paul Fincham, said: “Pricing has changed in the markets. Also we have seen other lenders move so we needed to adjust our rates.”
Ray Boulger, spokesperson for the broker John Charcol, said: “It means that the effect is now being felt by borrowers across the board.”
