Following our report yesterday about how Lloyds TSB, Britain’s largest mortgage lender had increased its interest rates, now Abbey National, Britain’s second largest lender has increased its interest rates too.
Abbey has really increased its market share in the mortgage sector this year, taking advantage of its rivals troubles, and yet despite a drop in the cost of lending and the interest rates by the Bank of England, it has increased its two-year tracker rates by 0.25 percent, making it 2.25 percent over base rate. In additional, it has also increased its arrangement fee by 33 percent, from £995 to £1495.
The Abbey is also one of the lenders clamping down on people shopping round for mortgages. It has now got a £200 fee for those who apply for a mortgage and subsequently change their minds.
Melanie Bien of Savills Private Finance, the mortgage broker, said: “Borrowers must watch out for extra fees such as this which push up the cost of a deal. Given that it can take months between agreeing a loan and completing in this market, pricing on mortgages could have dipped dramatically in the meantime so you may well want another deal. Particularly in the current climate with swap rates and, correspondingly, fixed rate deals falling sharply, borrowers should not be penalised for taking out a better rate, especially if it is with the same lender.”
Abbey’s share of the mortgage market was estimated at around 28 percent in September this year.