Bradford and Bingley ups mortgage rates

UK lender Bradford and Bingley has increased its rates for buy-to-let mortgage loans for new customers.

As of today (Friday, June 6th), rates for new borrowers will increase by as much as 0.55 per cent. The minimum rise will be 0.05 per cent.

Every new variable rate mortgage rate has increased by 0.45 per cent.

The bank explained that the extra charges for new mortgages have been implemented because raising funds in the financial markets has become so expensive.

A spokeswoman for Bradford and Bingley said: "Our competitors have been re-pricing upwards in recent weeks and others have withdrawn from the market completely.

"This means that there is a risk that our lending volumes would increase to a point where our service levels would be under threat, and the increased cost of funding would mean we wouldn''t make an acceptable return."

Earlier this week the lender revealed that arrears among buy-to-let customers had increased by 52 per cent in the four-month period from January to April this year.

Yesterday, the Bank of England decided to keep its base rate unchanged at five per cent.