Major mortgage provider Northern Rock will be increasing its sub-prime fixed rates from by up to 1.25 per cent August 29, and will also be withdrawing all sub-prime trackers until further notice, MoneyMarketing reported today.
This news comes after weeks of turmoil in the financial market, that has seen Northern Rock’s share price fall dramatically from 1258p to 612p.
Like many other financial services companies, Northern Rock is acting out of fear of the volatile market that has been affected by the collapse of the US sub-prime mortgage market that has seen rates rise across the financial sector.
Northern Rock mortgages is not the only lender to have increased its sub-prime rates in recent weeks; Victoria Mortgages is another such lender, having raised its near-prime products rates by 1.25% and its sub-prime rates have gone up by 2.5%.
GMAC announced earlier this week that it will increase rates by 0.75 per cent, and Kensington will be increasing its rates by 0.55 per cent. It’s thought that most lenders will increase their rates by between 0.5% and 2.5%.
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