So much for a prosperous new year. The global credit crisis is persisting, house prices are falling, stock markets are confused and a recession looms.
All this means that the Bank of England is under pressure to trim the base rate on Thursday - and there may be more cuts to come. So why are some lenders pushing up the costs of new mortgages and what can you do to save money?
What is driving up mortgage rates?
Though the base rate is tipped to fall, which in theory should lead to better rates for mortgage borrowers, the credit crunch has made it harder for banks to find the money to lend.
Because there is less money available, there is more competition from borrowers - and less need for lenders to offer cut-price deals.
Many are deliberately limiting the new business they attract. HBoS, the biggest mortgage lender, says it is no longer aggressively trying to boost market share.
Northern Rock, which last year accounted for one in five new mortgages, has all but stopped lending.
Jonathan Cornell, of national mortgage broker Hamptons International, says the supply of lending is far lower than it has been for some time. 'The demand for mortgages exceeds the supply, which is bad news for borrowers,' he says.
Is everyone feeling the pain?
No. The increase in rates applies mainly to new tracker deals that follow the base rate plus a margin. This means when the base rate falls or rises, the rate on a tracker mortgage changes accordingly.
But several lenders have been increasing the margin between the base rate and the rate charged to try to boost their profits.
Who are the guilty parties?
In the past month more than ten lenders have put up tracker rates, including Yorkshire Bank and Bradford & Bingley, which increased rates by up to 0.40 and 0.45 of a percentage point respectively. Woolwich, Nationwide and Intelligent Finance have also raised rates on selected trackers, while Abbey has raised rates on some deals by up to 1.15 points.
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