Mortgage charges are still rising

The credit crunch has led some big mortgage lenders to announce another round of price rises for new customers.

Cheltenham & Gloucester has put up its fixed rate deals by up to 0.6%, and raised its tracker rates by up to 0.4%.

And Abbey, the UK’s third biggest lender, is levying higher initial fees and demanding larger deposits for some of its key deals.

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Banks lose overdraft charges case

The UK’s biggest banks have lost a test case about overdraft charges.

A judge has decided that the Office of Fair Trading (OFT) can rule on the fairness of the charges, which many customers have been trying to reclaim.

Mr Justice Andrew Smith said his judgement did not necessarily mean the charges were unfair.

But the decision opens the door for the OFT to demand that banks cut their charges, unless any subsequent legal appeals are successful.

Thousands of cases currently on hold in the county courts will be frozen until 22 May, by which time the banks must decide whether they are going to appeal against the ruling.

Any additional High Court hearings after that date may further delay those claims. [Read more]

Lenders to discuss mortgage woes

Chancellor Alistair Darling and Housing Minister Caroline Flint are to meet mortgage lenders later to urge them to do more to help struggling borrowers.

Mr Darling will ask the industry to find ways to prevent those in trouble from having their homes repossessed.

It follows his backing of a £50bn Bank of England plan to allow banks to swap mortgage debts for government bonds to help them during the credit crunch.

The global squeeze has made mortgages harder to find and more expensive.

The rate at which banks lend to each other has been rising, which has seen banks toughening up their lending terms even though official UK interest rates are falling.

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