According to a recent report banks and building societies are being forced to carry out regular reviews into the interest rates charged on their mortgages as a result of the global credit crunch, which has wreaked havoc in the mortgage and other financial markets. This means that effectively some mortgage costs could be going up on a daily basis. The research into the rate at which some mortgages have been rising in terms of their interest rates was undertaken for the Daily Telegraph.

The research showed that in the space of just ten days the average rate of interest on a mortgage loan with an interest rate that was fixed for two years had gone up from 6.15% to 6.29%. Based on this calculation a new borrower would pay around £156 more each year on their mortgage repayments on a £150,000 mortgage, taking the yearly cost from £11,760 to £11,916.

The annual increase compared to the same loan and mortgage just two years ago is a huge £1,464. The rise in interest rates on mortgages from various lenders comes despite the two recent interest rate cuts from the Bank of England, which were applied in December and February of this year, each for 0.25%. A further rate cut is expected in April as a result of the tight credit conditions, although experts had previously predicted that the next rate cut would be in May.

One economist stated: “The credit card crunch has well and truly hit the ordinary consumer looking to get a mortgage or run a business. The tighter terms in the financial markets are now affecting the man in the street.”