The international credit squeeze has prompted Ulster Bank and First Active to increase some mortgage interest rates. Rates for some tracker mortgages will rise by 0.1%. Existing customers will be unaffected.
Normally banks borrow money from other financial institutions and lend it to customers who need mortgages. But the international credit squeeze means the banks have been putting up charges to one another.
That change is now being felt by consumers with Ulster Bank and First Active increasing rates on some tracker mortgages by 0.1%. The banks took the step in response to increased funding costs.
Ulster Bank has also increased rates for some savers, while First Active has cut some rates on fixed mortgages.
But the move to increase mortgage costs shows that many banks are feeling the effects of the credit squeeze. The move by Ulster Bank and First Active today could be taken by others in future.
