Mortgages Uncovered

The mortgage lending part of Barclays Bank have withdrawn all their fixed 2 year rates from the market as Nationwide announced plans to raise some of its rates on home loans for the 2nd time in a fortnight.
Woolwich is quoted as saying it needs to “control customer volumes” and has now close to doubled fees on tracker rate deals raising them from £595 to £995.

This has happened during the US mortgage crises which also now mean higher interbank lending costs.
During the previous 3 years these 2 year fixed rate deals have been the market’s most popular type of mortgage deal.

Through 2006, nearly 1.5 million borrowers which equates to 3/4 of all homeowners, took out these 2 year fixed rate deals according to the Council of Mortgage Lenders.

Now Nationwide Building Society, UK’s 2nd largest mortgage lender, hiked up rates by ½% for the second time in 2 weeks.

A Nationwide spokesperson said this was due to “sharp increases in money market rates”, and the recent increases of their rival mortgage lenders. There was also a hint that more rate increases and changes could be expected from them due to the volatile marketplace.

People seeking 2-year fixed-rate loans on up to 90% face increased interest rates of 6.95% which is up from the previous 6.45%.

As an example, on a home loan now of £150,000 the increased difference in monthly repayments would now be £47.