Halifax pushes up mortgage costs

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Halifax has become the second major lender in as many days to reveal rises in mortgage costs, confirming it is raising its standard variable rate (SVR).

Some 850,000 borrowers will see their mortgage costs increase as the rate rises from 3.5 per cent to 3.99 per cent from May 1, due to the “significantly higher” costs of funding a mortgage in the current economic climate.

The average balance of the customers affected is £67,500, meaning payments would increase by nearly £16.40 a month to £498.95 on a capital repayment mortgage with 15 years remaining. This is nearly £200 extra a year.

Someone with a higher balance of £100,000 would pay £24.30 extra a month, with monthly repayments going up to £739.19, the equivalent of nearly £300 more annually.

The move came after RBS-Natwest confirmed it was to push up rates on two of its products by 0.25 per cent, taking them to a rate of 4 per cent, affecting around 200,000 customers.

The rises come even though the Bank of England is maintaining the base rate at a low 0.5 per cent.