Only recently we reported increases in the cost of fixed rate mortgages, and now it seems they are rising yet again; in some cases this is the second time in two weeks.
The Nationwide Building Society is increasing the cost of its fixed rate mortgages this week by 0.5 per cent and Woolwich, part of Barclays, is increasing its fixed rate mortgages by 0.7 percent. These hikes aren’t just for those with a smaller deposit either and even those with the 25 percent deposit will see an increase.
Both lenders are blaming their competition for the decision despite the fact that when Nationwide increased its rates just two weeks ago it sparked a range of increases from others.
A spokesman for Woolwich said: “In light of our competitors moving their rates upwards in the last few days, we have seen a massive demand for our mortgages, and so in order to control the flow of business we have had adjust our mortgage range in line with the market place.”
A spokeswoman for Nationwide said: “We are tweaking certain rates in response to other lenders and to manage volumes of business.”
Several building societies, the Halifax, Cheltenham & Gloucester, Abbey, Royal Bank of Scotland and Northern Rock all increases their costs.
In our last article, the increased cost of inter-bank lending, covered in the CeMAP syllabus, was blamed even though the average profit margins are now three times higher than before the onset of the credit crunch according to figures from Moneyfacts.
