New mortgage pain hits home as Halifax puts up rate to 5.8%

BRITAIN’S biggest mortgage lender Halifax today piled more cost of living pain on homeowners by increasing the cost of most of its fixed-rate deals by more than a percentage point.

- Jonathan Prynn Business Editor

The rises, which come after Kwasi Kwarteng’s botched mini-budget brought turmoil to financial markets, mean that owners face substantial increases in their costs when they move or remortgage. For first-time buyers it will make it even more expensive to climb on the housing ladder.

Deals that were at historic lows close to one per cent a year ago are nowwell over five per cent in most cases. Lenders say they have been forced to move by dramatic rises in so called swap rates last week in expectation of a big hike in the Bank of England’s benchmark lending rate on November 3.

The interest rate on Halifax’s two-year fixed deal for buyers with a 40 per cent deposit rises from 4.56 per cent to 5.84 per cent, lifting monthly bills on a typical 300,000 mortgage in London from 1,677 to 1s,903.