Homeowners are running out of time to secure a cheap mortgage deal
It's now even more expensive to take out a mortgage with some big names including Halifax, Santander and Nationwide
HOMEOWNERS looking to secure a cheap mortgage deal need will need to act fast, after ten mortgage lenders put up their rates in the space of a week.
Nationwide, Halifax and Santander are among the ten whose raised rates will affect first-time buyers and those looking to renew their mortgage.
This is bad news for borrowers who want to sign up to fixed rates, where the interest rate is locked for a set amount of time, usually two or five years.
Now, homeowners will be looking to make even bigger monthly payments than they would have if they'd taken out a new mortgage the week before.
The biggest lender to put up their rates is Nationwide who increased its cheapest two-year fixed deal from 1.19 per cent to 1.44 per cent.
Although an increase of 0.25 per cent doesn't sound like much, we explained how a rise that small could actually add hundreds to your bills.
Currently, a £150,000 mortgage over 25 years with an interest rate of 2 per cent would cost you £635 per month.
If rates were to rise by 0.25 per cent, the same mortgage would cost you an extra £18 a month - a hefty £216 a year more.
Halifax also put its selected fixed rates by 0.2 per cent and Santander put its up by 0.15 per cent.
Personal finance expert Andrew Hagger said that borrowers can still get a good deal if they act fast, but warns the rise could cause a snowball affect.
"Over the longer term this is bad news for first time buyers," said Andrew. "As their budgets will be squeezed even further due to higher monthly repayments.
"At the same time house prices are still creeping up and the cost of living is soaring too - so there's not much for borrowers to smile about."
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This increase is down to the lenders who expect the Bank of England - who set a guide to interest rates - to raise them before the end of the year.
This means that Banks will be able to charge higher interest rates on lending mortgages.
A finance expert from Moneyfacts said that people taking out mortgages shouldn't feel disheartened.
They said: "Unfortunately with rates at rock bottom levels the only way from here is up.
"But with rates starting to move upwards now people need to act fast to ensure they get the best deal.”
Other banks that have also raised their interest rates over the past week by between 0.1 per cent and 0.3 per cent include Monmouthshire Building Society, Newcastle Building Society, Aldermore and Skipton, Leeds and Coventry Building Societies.
In September, the Bank of England decided to keep the rates at their historic-low of 0.25 per cent.
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