Mortgage borrowers face a new wave of rate rises
Mortgage lenders took interest rates on home loans to new highs following turmoil on financial markets, deepening the affordability crunch facing borrowers and adding to gloom over the prospects for the housing market.
Rates on two-year fixed rate mortgages hit 6.46 per cent on Wednesday, with five-year rates reaching 6.32 per cent, the highest level since the financial crisis, according to data provider Moneyfacts.
Barclays raised rates on fixed-rate home loans by 0.8 percentage points on Wednesday; its 10-year fixed rate deal, for example, rose from 4.85 to 5.65 per cent for borrowers with a large deposit of 40 per cent or more. This followed increases on Monday of up to 1.29 percentage points by Halifax.
Hinckley & Rugby Building Society paused all new applications for mortgages, citing “an ongoing period of very high demand, which is now putting our service under pressure”.
Rocketing mortgage rates have left some homeowners facing big rises in costs at the same time as the prices of fuel, food and other domestic basics have been rising rapidly.
This story originally appeared on: Financial Times - Author:James Pickford
