Mortgage rates set to rise
Over one million home owners will experience an average rise of £200 per year on the cost of their mortgage from 22nd May. This is due to many lenders announcing rate rises including Halifax, who are increasing its standard variable rate from 3.5pc to 3.99pc which will affect the majority of the million borrowers.
The other lenders that are also increasing their rates are the Co-operative bank, Yorkshire Bank and the Clydesdale Bank. The reason behind the rise is due to the fragile economy making mortgages harder to finance.
Many people will struggle to switch to a better deal which has caused concern. This is because lenders are starting to tighten up their borrowing criteria, resulting in a fall of approved mortgages.
The Royal Bank of Scotland Natwest is also increasing the rate of its One Account by 0.25pc, meaning the new rate will be 4pc, effecting around 100,000 customers.
More restrictions on mortgage loans are being enforced by the Financial Service Authority, who have recorded an increase in irresponsible lending and the new regulations will ensure borrowers can only take out deals they can afford.
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