UK Money News
30th January 2008
Credit crunch hits tracker mortgages
The effects of the credit crunch have hit tracker mortgages, according to research from the personal finance website, Moneyfacts.co.uk.
With the financial markets still in turmoil, high street lenders are tightening their credit conditions.
Separate research earlier this month, showed a number of mortgage providers had been slow to pass on the cut in interest rates introduced in December.
Now Moneyfacts.co.uk has found at least ten lenders increasing the margin on tracker mortgages.
This means that if the base rate falls in February, anyone with a recently-agreed tracker could find themselves still paying more for their loan.
"In the last two weeks alone, analysis from Moneyfacts.co.uk has revealed that ten lenders have increased the margins on tracker mortgages by as much as 0.45 per cent," said Denise Harvey, a mortgage analyst at Moneyfacts.co.uk.
"Existing tracker customers will be waiting with baited breath for the rate decision next Thursday, knowing their rate will fall in line, but these recent increases will impact prospective new borrowers."
Tracker mortgages go up and down with the base rate, but with some lenders now adding 1.19 per cent rather than 0.79 per cent to the Bank of England interest rate, the difference will be felt even if there is another cut.
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