Downturn sees Lloyds raise rates

Lloyds TSB has joined a host of other lenders in announcing a hike in the cost of its mortgage rates.

tbc
The group, which also lends under its Cheltenham & Gloucester brand, is increasing the cost of its two and three-year fixed-rate mortgages by up to 0.26%.

Last week, Halifax, one of Britain's biggest mortgage lenders, announced that it was raising the cost of its deals by up to 0.45%.

The group, which is being taken over by Lloyds TSB, blamed the move on the recent global financial turmoil.

It also said it would no longer offer 95% mortgages through brokers, although it would continue to lend this amount through deals taken out directly with the bank.

The changes leave Halifax's and Lloyds TSB's two-year fixed-rate mortgage for someone borrowing 75% of their home's value at almost the same level.

Lloyds TSB is offering a rate of 5.94% with an arrangement fee of £995 for one of the loans, while Halifax is offering 5.95% and a fee of £999.

One of the key inter-bank borrowing rates, three-month Libor rate, which affects the pricing of tracker mortgages, has soared from a recent low of 5.7% to nearly 6.28% on Friday - the highest level since December last year, and the biggest differential to the Bank of England base rate since September 2007.

Copyright © PA Business 2008

Did you enjoy that? Why not share this article

Take control of your energy bills

Our handy tips and tools will help make sure you never overpay again

Popular guides