Bardford & Bingley raises interest rates
by Gill Montia
Bradford & Bingley (B&B) has today raised mortgage rates for new borrowers.
The lender, which funds one-quarter of the UK buy-to-let market, blamed the increased cost of borrowing on the money markets for hikes of between 0.05% and 0.55% on its range of loans.
The move comes despite yesterday’s decision by the Bank of England to keep the base rate at 5% for June and follows B&B’s struggle earlier this week to shore-up its balance sheet via a rights issue and an injection of cash from private equity group, Texas Pacific Group.
The lender recorded an £8 million pre-tax loss in the first four months of the year and also reported that the number of borrowers who are more than three months in arrears with their mortgage payments rose from 1.63% to 2.16%, during the same period.
Further bad news for homebuyers is expected next week from Abbey, which is reported to be raising interest on its fixed-rate deals.
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