Three mortgage firms raise rates

Problems in the credit markets means higher mortgage costs

Mortgage lenders Bradford & Bingley, First Direct and the Co-operative Bank have all raised the cost of their fixed-rate home deals.

Bradford & Bingley has increased the cost of its fixed-rate residential loans by between 0.5% and 0.7%.

First Direct raised its two-year fixed deal by 0.16% to 6.15%. The Co-op upped its three-year fixed rate by 0.7% and its five-year rate by 0.9%.

The move comes as banks find it harder and more expensive to finance loans.

They have been caught up in a global credit crunch, which has signalled an end to a decade of cheap loans and easy lending.

Faced with slower global economic growth, quickening inflation and weakening property markets, banks are tightening their lending requirements and lifting the rates at which they offer mortgages.

Bradford & Bingley also raised the rate of its lifetime variable mortgage rate by 0.1% and put up the cost of its buy-to-let deals by 0.3%.

The mortgage firm's fixed-rate self-certification mortgage rates have climbed by 0.95%.