Mortgage interest rates 'may increase in 2010'

Date:Friday 9th October 2009
Author: Max Freedman

Interest rates on mortgage deals could increase in early 2010 once lenders have achieved their target market share for the year according to an industry commentator.

Andy Pratt, chief operating officer at Alexander Hall, made his comments following the news that several big lenders have dropped their interest rates on some mortgage deals.

He suggested that Abbey, which lowered the interest on some of its mortgage deals by up to 0.11 per cent this week, may push up the cost of its products for consumers after it has taken back some of the market share won by HSBC.

Mr Pratt said: "It is just really a moment in time to make sure that they get what they want."

Another issue at hand is that the gross value of the mortgage market this year is predicted to be under half of the £360 billion that it was worth in 2007, meaning lending has gone down by a significant amount, he added.