May 24 2013 Latest news:
Adam Aiken, Editor
Tuesday, May 1, 2012
More than a million homeowners have been hit by higher mortgage repayments after rate increases by a number of providers kicked in.
Halifax, the Co-operative Bank and Yorkshire Bank are among those that have raised their rates, blaming the weak economy and the increased cost of providing funding for home loans.
About 850,000 customers with Halifax – the UK’s biggest mortgage lender – have seen their standard variable rates (SVRs) rise from 3.5pc to 3.99pc.
“This is a kick in the groin for homeowners,” said James Moss, managing director of Curzon Investment Property.
“It’s bad news for two reasons. At a time of rising energy prices and food bills, this will hit people hard.
“Secondly, those borrowers who are already on the verge of falling behind could be tipped over the edge or boxed in from being able to remortgage on to better deals if they’re already in negative equity.”
A borrower with an outstanding mortgage balance of £100,000 will be paying an extra £24.30 a month, or nearly another £300 annually.
Elsewhere, more than 50,000 Co-op customers have seen their SVRs go up by 0.5pc to 4.74pc, and 30,000 Clydesdale and Yorkshire Bank customers have been hit by a rise of 0.36pc, to 4.95pc.
And Royal Bank of Scotland/Natwest has increased the rate on the One Account by 0.25pc, affecting about 100,000 people.
Ben Thompson, managing director of Legal & General Mortgage Club, said: “With more than eight million of the total 11 million or so UK mortgage borrowers currently on a floating rate of some description, the question is how many more borrowers will be affected in this way, and which lenders will make similar moves?
“Although nobody wants their mortgage rates to rise, today’s rates have to be seen in the context of historical levels, and they are very low indeed by comparison.
“It is almost certain that we have now seen the cheapest mortgage rates in a lifetime and that rates bottomed some time ago.”