High inter-bank rates are beginning to take their toll on consumers.
Rates are on the rise again, with a major lender imposing increases on some deals.
HSBC made the move yesterday, following the recent market turmoil. The recent bankruptcy of Lehman Brothers and the takeover of large banks including HBOS have caused extreme volatility on the equities and bond markets.
Crucially, Libor - a rate measuring how much banks are charging each other for loans and a key indicator of market confidence - has also been on the rise. High Libor means that banks have less easy access to quick funding - resulting in a constriction in credit that causes corresponding rises in consumer loans rates.
Libor is currently well over six percent - more than a percentage point above the Bank of England's base rate and the highest it has been since December 2007.
Accordingly, HSBC is increasing fixed rates for mortgages with a loan to value ratio of 90 percent (in other words, requiring a mortgage of ten percent) by 0.3 percent. First Direct, also owned by HSBC, is to put up its two year fix by 0.2 percent.
"I think the majority of lenders are looking at the pricing of their mortgages," Aaron Strutt at mortgage brokers Chase De Vere told the BBC.
"We could see a lot of changes over the next few days."
