Variable mortgage rates increasing

17 September 2007
Many of the UK's leading lenders have decided to raise interest rates on their variable mortgage products for new customers, it has been claimed.

Julia Harris, mortgage expert at Moneyfacts.co.uk, said that some firms had increased their rates by up to 0.25 per cent.

However, Ms Harris suggested that this trend is not necessarily the result of uncertainty within the sub-prime market impacting up the wider mortgage sector.

"If we start to see more significant and prolonged increases, or standard variable rates begin to rise, then it may be a sign that the market is suffering at the hands of its investors," she commented.

Louise Cuming, head of mortgages at moneysupermarket.com, warned that the mortgage market could potentially become an "untamed beast" as it moves away from the controlling influence of the Bank of England.

According to Ms Cuming, several lenders are likely to announce rate increases in the near future.

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