Bradford & Bingley has raised its mortgage rates by as much as 0.55% for new borrowers.
The move comes despite the Bank of England’s decision to keep interest rates steady at 5%.
Rates for new borrowers will rise by between 0.05% and 0.55% from today, following announcements of high arrears and an £8m loss at the bank earlier this week.
Other banks may also raise their rates next week as mortgage rates become further detached from the Bank of England’s base rate.
Nationwide has already raised rates on some fixed-rate deals by as much as 0.3%.
Among Bradford & Bingley’s buy-to-let-range range, all new fixed-rate deals will increase by 0.55%, while all new variable-rate mortgages will be hiked by 0.45%.
Two and three-year fixed rates in Bradford & Bingley's standard range for new borrowers will increase by 0.20%, with 10-year fixes increasing by 0.10%.
Other rates are also being increased.
According to Bradford & Bingley, the reprice has been planned for several weeks and reflects the decisions of its competitors.
A spokesperson says: "In our key market of buy to let, our competitors have been repricing upwards in recent weeks and others have withdrawn from the market completely.
"This means that there is a risk that our lending volumes would increase to a point where our service levels would be under threat, and the increased cost of funding would mean we wouldn't make an acceptable return.
"We have, on average, repriced our range at least once a month for the last 18 months, and always with the objective of managing our returns and service levels."
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