Barclays has joined many of the other high street banks in hiking up the rate of interest on its fixed-rate mortgages.

Barclays has joined many of the other high street banks in hiking up the rate of interest on its fixed-rate mortgages by up to 0.7 of a percentage point.

Selling mortgages under its mortgage brand, Woolwich, the bank has raised rates by between 0.2 and 0.7 of a percentage point, following the example of Nationwide Building Society, Abbey and Halifax.

Nationwide announced on Monday (22 June) that it was increasing the cost of its fixed-rate mortgages for the second time in two weeks. It previously hit borrowers with an across-the-board hike in the cost of fixed-rates of up to 0.86 points.

Barclays said it needed to raise rates to stem a rush of new business following a series of rate increases from other lenders, and all are attributing the rising cost of wholesale funding for the increases in the cost of fixed-rate loans.

The bank has also increased the minimum deposit it asks new customers to put down to get a mortgage – borrowers now have to have a deposit of 20%, up from the 15% previously required, equivalent to £30,000 on a £150,000 property.

For those borrowing 70% of a property’s value with a two-year fixed-rate mortgage from Woolwich – the rate has risen by 0.2 of a point from 3.99% to 4.19%. However, for a loan borrowing 80% of the property value, the rate has gone from 5.29% to 5.99%, a considerable leap.

For five-year fixes, rates have risen by half a percentage point. On 70% loans the interest rate has increased from 4.79% to 5.29%, while for 80% advances the rate has risen from 5.79% to 6.29%. A fee of £999 applies on all of these loans.

A spokesman for Barclays said: “The cost of mortgage funding has been pushed up recently, with Barclays being one of only a handful of lenders still offering competitive mortgages.

“In light of our competitors moving their rates upwards in the last few days, we have seen a massive demand for our mortgages, and so in order to control the flow of business we have had to adjust our mortgage range in line with the marketplace.”