More lenders put up fixed rates

Three more lenders have increased the rate offered on their fixed rate mortgage deals, following a move last week by Nationwide Building Society which increased the rates its entire fixed rate mortgage range by an average of 0.2 percentage points, with some deals seeing their rates jump by 0.86 percentage points.

Early last week, leading mortgage broker John Charcol warned that lenders were poised to increase the rate on fixed mortgage deals in response to an increased in wholesale funding costs.

Now, Halifax, Cheltenham & Gloucester and Abbey have all increased their fixed rates. Halifax and Abbey are raising fixed interest rates by up to 0.5 percentage points, while Cheltenham & Gloucester is adding up to 0.7 percentage points to its fixed deals.

Speaking last week, Mr. Boulger’s said:

“There is still some comfort for those borrowers looking for a tracker rate as there is no reason for lenders to increase tracker rates just yet, based on the cost of funds; 3 month Libor has been slowly edging lower and is currently at its all time low of 1.26%. Its margin of 0.76% over Bank Rate is the lowest it has been for several months.”

In fact, some lenders may move to reduce the rate on trackers to attract those put off by rising fixed rates. Halifax has today reduced the interest rate on one of its tracker mortgages, by 0.2 percentage points.

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