More movement in the mortgage market sees more rates rise and some disappear (for the time being).
Newcastle Building Society has increased all fixed rate products by 0.3%
For each £100,000 borrowed that equates to an extra £25 per month in interest charged.
Lloyds TSB has increased all Buy-to-Let fixed rate mortgages by 0.3% increasing the amount of rental required by the same £25 per month.
If the estimated rental potential of a buy-to-let property purchase can’t support this increase then fewer proposals will fit the required model and Lloyds TSB are likely to do less business.
Platform (the intermediary lender of Britannia Building Society) on the other hand, has withdrawn all buy-to-let products.
Lenders are repeatedly using the justification that due to increased demand they are forced to put up rates making their products less attractive and giving them time to deal with backlogs and maintain high service levels for customers.
The only drawback with this is that their customers coming to the end of an existing offer still need a mortgage.
The number of people purchasing has decreased but existing borrowers are currently seeing a large number of 5 year and 10 year fixed rate offers on the market at increasingly high rates.
Is it fair of lenders to make these long term commitments more attractive than shorter term offers and get consumers tied into high rates for a long time?
It does give certainty and stability but many experts predict interest rates will drop back to levels comparable to 2006 in just a couple of years.
On a slightly lighter note, Abbey has reduced the rates on some of its variable rate trackers by up to 0.15% (£12.50 per month per £100,000 borrowed).