Co-op announces mortgage interest rate change

26-Jan-2007

The Co-operative Bank has announced the decision to increase its standard variable interest rate, which may affect first time buyers who are not considering a fixed-rate product.

Effective from February 1st, the Co-operative Bank has raised its standard variable rate of interest to 7.25 per cent for first time buyers and repeat purchasers, following the Bank of England's monetary policy committee's (MPC) decision to raise interest rates to 5.25 per cent earlier this month.

To find out more about this mortgage and other mortgages for first time buyers, click here.

All mortgages from the lender have interest calculated on a daily basis and are free of any higher lending charges.

The 0.25 per cent increase in interest rates was broadly unexpected, with only one economist out of a Reuters' poll of 50 expecting a January rate rise.

"This was a tough but wise decision," said Graeme Leach, chief economist at the Institute of Directors.

"The MPC needed to stamp down on inflation given he upside risk at present," he added.

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