As reported recently, a number of mortgage lenders have been increasing the costs on their fixed rate mortgage deals as the cost of funding increases.

Yesterday, HSBC added its name to the list, blaming the move on the increased cost of funding.  The price of fixed rate mortgages is generally based upon the cost of three and five year swap rates, the rate at which banks lend to each other and HSBC stated the uncertainty of how interest rates will move in the future has led to the increase.

HSBC increased three year fixed rate mortgages by 0.15 per cent for those with up to 75 per cent LTV and 0.4 per cent for its five year fixed rate mortgages.

Other lenders to increased the costs of fixed rate mortgages now includes Lloyds TSB’s Cheltenham & Gloucester, the Halifax, Nationwide, Barclays’ Woolwich and more.

The price of the average five year fixed rate mortgage deal has now broken through the 6 per cent barrier for the first time this year.
For those with just a small deposit, the news is better as the number of available products is increasing, although 95 per cent and 100 per cent mortgages are still relatively unchanged.

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