Northern Rock, the Government-owned lender, has announced that it is pulling all its tracker deals for homeowners and landlords and is expected to increase rates when it relaunches the mortgages later this week.
It follows a move by Abbey earlier today to increase interest rates on tracker deals by up to 0.5 percentage points.
Tracker deals are pegged to the Bank of England base rate. The bank, owned by Spain’s Santander, has effectively reduced or cancelled out the Bank of England’s expected rate cut tomorrow, designed to alleviate the pressure on over-burdoned homeowers.
Experts say that lenders are likely to continue to protect profits margins at the expense of homeowners.
Aaron Strutt, of Chase de Vere Mortgage Management, a broker, said: “All the big lenders are expected to change trackers in the next few days. The margins between new tracker rates and the base rate are going to continue to increase.”
Northern Rock said it would review its tracker deals after the base rate announcement at midday tomorrow by the Bank of England’s Monetary Policy Committee (MPC).
Chelthenham & Gloucester, owned by Lloyds TSB, is also rumoured to be looking at its tracker deals and other lenders are expected to follow suit