Wednesday 11th June 2008
Bradford & Bingley seems to be among the financial services providers feeling the credit crunch, as it has announced increases to the interest rates on many of its mortgages.
The lender is imposing the sharpest rises on its buy-to-let range, with fixed-rate packages up by as much as 0.55 percentage points, Reuters reports.
Variable rates are up by 0.45 percentage points, with standard mortgages seeing a 0.1 to 0.2 percentage point rise.
However, Bradford & Bingley notes that the move is not unheard of, stressing that it reprices its range about once a month on average.
A spokesperson tells Reuters: "In our key market of buy-to-let, our competitors have been repricing upwards in recent weeks and others have withdrawn from the market completely."
She adds that "there is a risk that our lending volumes would increase to a point where our service levels would be under threat".
By repricing its own range, Bradford & Bingley anticipates that it may continue to derive an acceptable rate of return, Reuters notes.
The news provider comments that other lenders have also been raising their rates in recent days.
Nationwide is among those to have done so, according to Reuters, in light of elevated swap rates - used by the financial services industry to keep track of future interest rate expectations.
While increasing interest rates may be bad news for borrowers, they could be welcomed by savers, as Bradford & Bingley has also just launched new bonds.
The guaranteed-return deals come with rates of seven per cent and are available over one, two or three years.
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