Mortgage rates set to rise despite cut

Posted 2008-04-10

Mortgage rates are expected continue rising in spite of yesterdays interest rate cut by the Bank of England (BoE), it has been claimed.

While Nationwide yesterday lowered its base mortgage rate by 0.25 per cent in response to the BoE move, a number of its fixed-rate deals have increased by between 0.12 per cent and 0.32 per cent.

That comes on the heels of a 0.2 per cent spike in rates just a fortnight ago, and embodies a trend which is being echoed throughout the wider market.

Alliance and Leicester has also increased its rates for the second time in a week, and Britannia Building Society and Royal Bank of Scotland have both also sent their rates northward - confounded the base rate cut.

Alluding to the Banks attempt to offer interest rate relief, Peter Bolton King, chief executive of the National Association of Estate Agent, said the decision was "welcome" but he urged lenders to follow suit.

He concluded: "It is now more critical than ever that mortgage lenders adopt a similar approach and lower mortgage rates in line with todays drop."

Leave a Reply