The Greek euro crisis could add hundreds of pounds a year to the cost of a typical home loan, according to Adrian Anderson, from mortgage broker Anderson Harris. He believes that mortgages could rise by three quarters of a percentage point if the eurozone crisis escalates.
“There will be plenty of pressure on lenders to reduce the amount of lending they do, improve margins and raise mortgage rates in coming weeks,” Mr Anderson said. “We are already seeing lenders raise rates, and that’s even before Greece has made any official decision to leave.”
Economists from thinktank Capital Economics believe that the cost of a typical home loan could rise from 3.6 per cent to 4.5 per cent if the crisis worsens. This would push up repayments on a £250,000 home loan by £1,200 a year.
Howard Archer, chief economist at IHS, said that households would find it even more difficult to get mortgages than they are doing at present. “I suspect banks would be even more careful in their lending for some time to come – which would make it harder for many people to get mortgages,” he said.
There is already evidence that banks such as Santander, which is Spanish owned, have pulled back on lending in recent weeks. Brokers said that the bank was less keen to lend through them.
Ray Boulger, at John Charcol, said people should look for new deals now “before the market seizes up”.