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Fixed-rate mortgage margins increase again

During the last month, only a couple of lenders reduced selected rates, including Cheltenham and Gloucester and Nationwide BS. However, other lenders such as Barnsley BS, Chelsea BS and The Post Office all increased rates.

Many lenders have been looking to their savings books to fund their mortgage activity, but in the same period only six accounts saw an increase in rates.

Michelle Slade, spokesperson for Moneyfacts.co.uk, said: "Borrowers looking for a new mortgage deal are continuing to pay a heavy price for previous mistakes made by lenders.

"Margins continue to be increased as lenders look to repair dented balance sheets.

"Normal rules where lenders pass or decrease rates based on the cost of funding seem to have well and truly gone out of the window.

"Lenders have always been quicker to pass on increases rather than decreases, but many seem to be reluctant to pass on any decrease in the current climate."

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