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Fixed rate mortgage rates rise

The decision of 14 mortgage lenders to increase the interest rates on a selection of fixed-rate deals has acted to drive up the cost of borrowing, it has been reported.The news comes soon after the Council of Mortgage Lenders (CML) published figures which show that fixed-rate mortgage deals are now more popular than they were just a few months ago.In April, 59 per cent of all new loans were fixed-rate deals - the highest level reached this year.However, the effects of the credit crunch - which has increased borrowing the funds on the financial markets - means lenders are upping interest on fixed-rate deals in order to cover their own costs.According to the BBC, lenders including the Halifax, RBS and Birmingham Midshires have increased their rates, and Chase De Vere says the average cost of a two-year deal for a 90 per cent loan has reached 6.75 per cent."Things have not been this busy with the withdrawal of deals for a month or so," commented Aaron Strutt of Chase de Vere.

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