The question being asked by many householders is the reason why are mortgage brokers increasing interest rates and scrapping their finest deals when the housing industry is already in crisis and their own borrowing costs have fallen? The result is that some families are needing to look for a quick home sale to be able to escape arrears or repossession.

No wonder consumer confidence reaches an all time low when borrowers are living in fear how the base rate increases from its historically low 0.5% and mortgage goods are becoming less affordable.

It was announced a week ago that about the five year swap rate which is the interest banks charge each other to borrow money fell from 2.89% to 2.76%.

Halifax, the UK’s biggest lender pushed prices up for that third time this month. They increased the price of a two-year fixed rate mortgage from 3.84% to 4.09% and then to 4.34%. Their 3 year fixed loan increased from 4.64% to 4.79% and then again to 4.99% (with an 85% LTV mortgage).

A week ago, First Direct, HSBC and Accord Mortgages (Yorkshire Building Society) also increased their rates.

The least expensive fixed rate mortgages happen to be removed from the marketplace due to speculation how the base rate is going to be increased. Homeowners which are conscious of the problem are flocking to their lenders to try to secure a few of the better fixed rate deals before it’s past too far.

Many property owners are panicking that if the bottom rate and interest rates increase they'll have to sell property fast to live and are worrying they will not be in a position to do that in this slow moving market.

David Hollingworth based in London and Country Mortgages, advised that lenders had predicted that a rate rise may come sooner than expected which may happen to be to blame for the increase in swap rates. He said: “In fact, last week’s numbers pushed back the potential for a rate rise coming soon and also the markets edged back a little.

“Swap rates have levelled up and we often see them edge further down now.

“But there is a much bigger disconnect now between swap rates and glued rate mortgage rates, whereas back in 2007 the margin was very narrow”.

Based on Mr Hollingworth, the hike in interest rates is partially related to the elevated number of requests they've been receiving for fixed rate mortgages as lenders attempt to keep the situation under control.

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