Mortgage lenders up rates

Date:Friday 10th October 2008

Mortgage lenders have scrapped many of their best deals within a day of receiving up to £500 billion.

The Daily Mail reports how some mortgage providers responded to the Bank of England base rate reduction of half a point to 4.5 per cent by raising tracker mortgages by the same percentage.

As a result, new customers will not benefit from the base rate cut, the paper explained.

Among those raising rates is Abbey, the country's second biggest mortgage lender.

New customers now have their tracker rates raised by 0.5 percentage points.

Woolwich also raised its rates and upped the minimum deposit to 15 per cent this week.

And Lloyds TSB axed all its tracker mortgage products with deposits of ten per cent or less, forcing borrowers to stump up 25 per cent instead.

The Treasury's £500 billion rescue package and the Bank of England's 0.5 per cent interest rate reduction were welcomed in the City, The Express reported.

But the paper also noted that the bailout "gambles the equivalent of £16,000 for every taxpayer".