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Credit crunch 'hits home' as rates are raised

Britons are facing "sharply higher" home loans costs as high street lenders raise their rates, Reuters reports.

This follows a week of credit crunch-related mortgage loans withdrawals and cost increases from major lenders including HBOS and Nationwide.

Speaking to the news agency, technical manager at mortgage broker Charcol Ray Boulger said that consumers might feel "pain and shock" when they come to remortgage.

A fixed rate deal from two or three years ago would have been struck in far more favourable economic conditions - and will therefore be much more competitive when compared to the current market.

Mr Boulger also estimated that up to three million homeowners will be coming off their fixed rate periods and could be looking to remortgage this year.

If the rates-raising trend continues, this group could be facing markedly higher monthly loans repayments in future - especially if they do not shop around for the best loan deal.

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