Cheltenham and Gloucester, Norwich & Peterborough, Lloyds TSB Scotland and Halifax have unsurprisingly increased rates on selected mortgage products.

Halifax, Lloyds and C&G’s rates have risen by 0.3% and N&P by 0.25%.

Lenders rates continue to creep ever higher as ‘swap rates‘ force the price of money ever upward.

Swap rates are directly responsible for LIBOR, the London Inter Bank Offered Rate which is the rate banks offer to lend unsecured funds to other banks in the London wholesale money market.

LIBOR has been rising steadily as banks become more reluctant to lend to other institutions.

If banks are forced to pay high prices for money these will naturally be passed on to their customers.

Homeowners coming out of fixed rate deals from a time when LIBOR was much lower can expect a sharp increase in their monthly mortgage payments.

Example: (using a mortgage of £150,000 - interest only)

£150,000 x 5.0% = £7,500 (interest charged per annum) / 12 = £625 (per month)

£150,000 x 6.99% = £10,485 (interest charged per annum) / 12 = £873.75 (per month

This example shows a potential increase of £248.75 per month or £2985 per year. A lot for any household to suddenly need to find.