Halifax raises mortgage rate in UK
The UK’s largest mortgage lender today increased its borrowing rate following the Bank of England’s surprise move last week.
Halifax said its standard variable rate will increase from 6.5% to 6.75% which means a family with a £100,000 mortgage will have to pay just over £15 a month extra.
The rest of the major high street banks are expected to follow suit leaving millions of homeowners with higher borrowing costs.
Those with a £100,000 repayment mortgage over 25 years will have to pay an extra £15.71 a month. A family with a £150,000 mortgage will pay an extra £23.55 while those with a £250,000 mortgage will see payments increased by almost £40.
A spokesman for Halifax said: “As usual, the increase for existing borrowers will come into effect at the same time as the increase in savings rates on September 1 – full details of which will be announced later this month.
“Tracker mortgage customers will also see a 0.25% increase in rates, again effective from September 1.”
Northern Rock became the first of the major banks to increase its mortgage rate yesterday. A spokesman for Northern Rock said its standard variable rate will increase by 0.25% to 6.84% with effect from September 1.
The Bank of England said it was necessary to raise interest rates a quarter of a percentage point to 4.75% to curb inflationary pressures.
It also pointed out that household spending appeared to have recovered from its post-Christmas dip.
Industry leaders criticised the move and said the Bank had jumped the gun at a time when many firms were still finding their feet after a prolonged downturn.
