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Northern Rock hikes mortgage rates
Thu, 08 Jan, 2009
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Northern Rock hikes mortgage rates
Wed, 26 Nov 2008, 15:33:00
State-owned lender <b>Northern Rock</b> has ignored government calls for banks to drop mortgage rates in line with the base rate by raising the cost of some of its fixed-rate deals.<br /><br />The bank, nationalised in February, has increased the rate on its most popular fixed-rate mortgages to between 0.2% and 0.3%.<br /><br />Rock attributed the move to its promise not to take advantage of government backing, which involves not originating more than 2.5% of new mortgages in any one year and not being market leader in any product category for a sustained period of time.<br /><br />Their rates had been considered attractive by borrowers, which prompted a rush of new business in recent weeks.<br /><br />Its one-year fix goes up to 4.19% from 3.99%, while the two-year deal for a buyer with a 25% deposit and £995 for the arrangement fee rises to 5.19% from 4.99%.<br /><br />Chancellor Alistair Darling and Bank of England governor Mervyn King have both warned that action will be taken against the banks unless they begin lending again and cut borrowing costs.<br />
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