Mortgage institutions continue to up the interest rates

Posted under General by Alan

Just recently, the Bradford & Bingley, a leading mortgage bank, decided to restrict its lending to new borrowers. It chose to drop its popular two-year fixed rate deal that required a minimum 5 per cent deposit, and replaced it with two new deals – lasting for either three years or up to 10 years.

Simultaneously, another leading mortgage lender, the Woolwich, took a decision that affected the three deals it still had on offer with a 5 per cent deposit – a five-year fixed mortgage, a lifetime tracker, and loans on its standard variable rate.

Although B & B would still ask borrowers as a mandatory step to put down mere 5 per cent of the property’s value, the interest rates stand charged. In fact, they are now significantly higher than before – at either 6.49 per cent or 6.69 per cent respectively as compared with 5.59 per cent on their previous two-year deal.

Meanwhile, the CML – an official body of mortage lenders – has predicted that there will be about 45,000 repossessions in 2008 (up from just 27,100 a year ago).