Lenders increase mortgage rates for new borrowers
Obtaining a mortgage has become increasingly difficult since the credit crunch and the situation is worsening according to recent reports.
Several lenders have recently increased mortgage rates for new borrowers, including Abbey, HSBC, Halifax, Lloyds TSB, Santander, Britannia, and Cheltenham & Gloucester.
Customers taking out new fixed, tracker or discounted home loans will have to pay from 0.1 per cent to 0.4 per cent more.
According to figures from the Bank of England, the average two-year fixed rate deal, with a 25 per cent deposit, increased to 3.45 per cent in March, compared with 2.9 per cent in September.
In addition, several lenders are bumping up their standard variable rates (SVR) from next month.
Halifax, Bank of Ireland, Clydesdale and Yorkshire banks and Cooperative Bank are all increasing their SVR due to higher borrowing costs on wholesale financial markets.
Mortgages often revert to the lenders’ SVR at the end of an introductory period, so borrowers are advised to review their mortgage and see if they can find a better deal.
There has also been bad news on mortgage fees, with financial information service Moneyfacts reporting a significant increase in recent years.
According to Moneyfacts the average mortgage fee is now £1,502, 27 per cent higher than it was three years ago.
Fees are now at their highest level since Moneyfacts began keeping records.
With mortgages being so difficult to obtain it isn’t surprising that there has been substantial growth in the number of fraudulent mortgage applications.
According to Experian, fraudulent mortgage applications increased to 34 in every 10,000 in 2011, an 8 per cent increase from 2010 when 15 in every 10,000 cases were fraudulent.
The fraud usually involved giving false personal information in order to conceal a poor credit history or financial difficulties.
Applicants also made false claims about their employment status.
Experian’s study was based on data from the National Hunter and Insurance Hunter fraud prevention systems.