Mortgage Firms Up Rates

Fixed rate deals at three major UK mortgage lenders have been raised, the BBC reports.

Bradford & Bingley have upped their rates by a minimum of 0.5 per cent, with some mortgages increased by 0.7 per cent. Meanwhile, First Direct has increased its two-year fixed rate by 0.6 per cent, while the Co-op has implemented rises of between 0.7 and 0.9 per cent for its three and five-year fixes.

The high inter-bank rates which have come with the credit crunch has led to many financial firms facing severe problems with raising revenue. As a result, many have moved to increase their repayment rates for borrowers in a bid to shore up their balance sheets.

Recent research shows that the average cost of a two-year fixed rate mortgage in the UK now exceeds seven per cent for the first time since 1997, with the rate average currently standing at 7.02 per cent.
Speaking to the Guardian, Richard Morea at London & Country Mortgages said: "A lot of people are, understandably, asking themselves if they should be buying at the moment. You can fix your rent for the next six months, save for a higher deposit, sit it out while interest rates go up and watch house prices fall.

"I can see no reason why a first-time buyer should want to buy in this market."
 

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