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Halifax raises mortgage rates

Friday 05 December 1997 00:02 GMT
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Up to 2.5 million households are to face higher mortgages from next year following the decision by the Halifax, the UK's largest lender, to raise the cost of borrowing. The news dampened the relief felt across the country after the Bank of England's Monetary Policy Committee voted to keep the base rate on hold at 7.25 per cent.

Halifax will raise its standard variable mortgage rate by 0.25 per cent from 8.45 per cent to 8.70 per cent immediately for new borrowers, and from January 1 for existing borrowers, adding pounds 7.54 to the current annual monthly mortgage payment on a repayment mortgage of pounds 373.77 on a pounds 50,00 loan.

It said it was a delayed reaction to the last increase in interest rates. Deputy chief executive Gren Folwell said: "We believe that this will not have a detrimental effect upon the housing market and we are optimistic what the continued gradual improvement in house prices will continue into 1998."

Base rates unchanged, page 27

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