A week of mortgage rate rises

Commenting on a week of mortgage rate rises, Louise Cuming, head of mortgages at price comparison site moneysupermarket.com, said: "Last week's unprecedented worldwide financial crisis led to an immediate jump in LIBOR as liquidity reduced and banks became increasingly reluctant to lend to each other. It has taken only a matter of days for the impact of this to feed through to new borrowers - with a double whammy of higher interest rates and tighter lending requirements.

"The UK mortgage market isn't completely closed - but it isn't stretching the point too far to say it is only open to people with impeccable credit records and a deposit of 25 per cent or more.

"At the same time we've seen Bradford & Bingley closing its doors to new mortgage business, whilst admitting that the only part of its business that is growing is arrears collection.

"We have seen a flurry of activity as lenders withdraw competitive products, many of which weren't immediately replaced, and those that were now carrying much higher rates. HSBC has tried to help the situation by making some concessions and reducing fees, but for the average mortgage borrower, the net effect will be an increased cost. Only Scottish Widows Bank has bucked the trend with some welcome rate reductions.

"All in all, a grim week in the mortgage market which has undoubtedly quashed earlier shoots of optimism that were starting to show. As I feel things will not get better, the message is to act quickly if you need to secure a mortgage"