Mortgage lender's raising rates or cutting deals

Would-be borrowers will find that fixed-rate mortgages are rising and in some cases these deals are disappearing, according to a consumer website.

Julia Harris, mortgage analyst at Moneyfacts, has said that 11 lenders have raised their rates in response to an increase in inflation and the probability of a further rate rise.

Some of the lenders anticipating an increase in the base rate have responded by raising their own fixed-rate interest rates by 0.3 per cent.

Other mortgage lenders such as Alliance & Leicester and Skipton Building Society have gone one step further and withdrawn their fixed rate mortgages altogether.

She said: "With inflation hitting a 15-year high, the chance of at least one more base rate increase looks almost a certainty. While many borrowers have already opted for a fixed rate deal, those that haven’t will feel the pinch of any further rate rises."

The Office of National Statistics revealed earlier this week that inflation had reached 3.1 per cent, over one percent above the government target of two per cent. At the same time the retail price index reached a 15 year high.

These figures, paired with the disclosure of minutes from the last rate setting meeting of the Bank of England showing that two members already wanted to raise rates in April, has led to many experts expressing near certainty in a rate rise.