Increased mortgage rates 'too much to bear'

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Increased mortgage rates 'too much to bear'

Tue 17th Jun 2008

The average interest on a two-year fixed-rate mortgage has reached 6.75 per cent, the highest in ten years, Moneyfacts.co.uk claims.

The independent personal finance website also reported the average two-year variable-rate at 6.66 per cent and the average fixed-rate with a five-year term at 6.72 per cent.

Acknowledging that many borrowers prefer fixed-rate deals, Moneyfacts.co.uk warned that "many are likely to find this increased cost too much to bear".

But the website noted that with some lenders such as ING Direct having a standard variable rate (SVR) of 5.64 per cent, not all customers would suffer.

ING Direct was listed as offering the cheapest SVR deal, while Birmingham Midshire Solutions had the most expensive, according to Moneyfacts.co.uk.

Nationwide, one of Britain’s biggest mortgage lenders, has increased its rates for the second time this month, the Telegraph reports.

According to the newspaper, the average rate paid by a new borrower at Nationwide has gone from 7.35 per cent at the end of last week to 7.65 per cent.

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