Halifax tightens its mortgage belt

9 May 2008

Halifax is expected to put up prices on its direct mortgage range this week (20/05/08) – and is also believed to be planning to scrap the sale of popular two-year fixed products via its branches.

The lending giant, which is part of the HBOS group, declined to confirm when prices on its direct range of mortgages will increase, and by how much.

However, spokeswoman Heather Scott told Moneywise: “We’ve not increased rates on our direct range for three weeks now while our competitors have.”

She added: “We price in line with the market. Wholesale money continues to be significantly more expensive than it was a year ago. Unfortunately, this increased cost needs to be passed on to new customers by banks and building societies.”

The price changes will be focused on mortgage deals available direct through branches, and products sold through mortgage brokers are unlikely to be affected at this time.

There have also been reports that Halifax may stop selling two-year fixed products through its branches. Scott refused to comment on this issue.

Meanwhile, Alliance & Leicester has increased rates for new borrowers who are unable to put down large deposits.

Following in the footsteps of Halifax and Nationwide, A&L will now only offer mortgages to people able to put down a deposit of at least 10%.

And the larger the deposit, the cheaper the deal. People with deposits of 10% taking out fixed-rate deals will now pay around 0.5% more than those with deposits of 25%.

Woolwich also recently announced that it would only lend to borrowers able to put down a deposit of at least 10%.

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