Mortgage costs rising

Mortgage costs are rising at the fastest pace in living memory, a financial expert said yesterday.

Ray Boulger warned it was becoming much more expensive to take out a loan, on the day the Bank of England decided to hold interest rates at their current level.

Abbey, the second-biggest mortgage lender, yesterday announced its second rate rise in eight days.

Halifax, the industry leader, and Chelsea Building Society have also hiked the rates on some of their mortgages.

Other lenders are likely to make similar moves in coming weeks.

Mr Boulger, of mortgage broker John Charcol, said: "Conditions in the mainstream mortgage market are now rapidly deteriorating at a frightening speed.

"Lenders are changing their pricing and/or their criteria at the fastest pace in living memory, and probably ever."

Abbey and Halifax are signalling a dramatic change in policy because lenders have traditionally followed the Bank of England's lead.

Yesterday the central bank's monetary policy committee voted to hold rates at 5.25 per cent.

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