Mortgage rates, which had started to ease in recent weeks, are rising again, as lenders react to the sharp jump in funding costs triggered by the banking crisis.
HSBC and Woolwich are to increase some of their fixed mortgage rates today by 25-35 basis points. Both lenders attribute the changes to the rise in wholesale costs.
'The cost of funding fixedrate mortgages has substantially increased over the past two weeks, and as a result Woolwich has had to increase fixed rates as well as making small changes to lifetime tracker rates,' said Andy Gray, head of mortgages at Woolwich.
Banks have become more reluctant to lend to each other after the collapse of Lehman Brothers and the resulting turmoil in the financial markets.