Halifax to put up interest rates

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Halifax to put up interest rates

The interest rates on a range of deals for new borrowers will be put up by the Halifax, part of Lloyds Banking Group.

The fall-out from the mini-budget initially led to a slump in the value of the pound, as traders expected a sharper increase in interest rates by the Bank of England than previously anticipated.

The mortgage providers pulled hundreds of deals out of the market because of that. This week, the availability of products has started to pick up again.

That is affecting about 100,000 homeowners each month who are getting a new home loan, remortgage and first-time buyers.

It was 4.74% on the morning of the speech. It is now 5.97%. A five-year fixed deal has typically gone from 4.75% to 5.75% over the same period.

The largest of them -- the Halifax -- will increase its own on Wednesday. The current upheaval is likely to be a short term issue with lenders trying to reset prices rather than a longer-term problem, according to a spokesman.

He said that lenders were playing safe with their rates. The TSB has a stricter test of affordability - checking whether homeowners can cope with rising rates for first-time buyers to 8% or 7%.

Some specialist lenders, whose customers may include those with a chequered credit history or the recently self-employed, have raised rates to 6.5 -- 7% or more.

He said that economic clarity provided by clear forecasts from the Office for Budget Responsibility should eventually feed through to stop the increase or see a reversal of mortgage rates.