Homeowners warned as mortgage rates rise

People looking for a first mortgage and other home loan hunters are being advised to think carefully about their options after reports of an increase in mortgage rates among some lenders.

Although there are still numerous good deals to be had by property owners, moneysupermarket.com is urging caution after a spate of rate rises.

Louise Cuming, head of mortgages at the price comparison site, described the mortgage as an "untamed beast" which is no longer under the "controlling hand" of the Bank of England.

She added: "It appears we are entering a new playing field in the mortgage arena, where rates have a life away from Bank of England decisions.

"Homeowners may have breathed a sigh of relief after last week's hold on base rates, but it is no longer safe to see this as an indication of stability."

High-street lenders Abbey and Halifax have both confirmed a rise in the rates of their tracker mortgages despite interest rates holding fast.

"We are facing a market of increasing turmoil and I suspect that Halifax and Abbey are the first of many big providers to announce increases," Ms Cuming concluded.

The current economic conditions are good news for savers, however, with some earning interest of up to seven per cent for the first time since 2001.

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