Halifax has increased the cost of its two-year fixed rate mortgages and trackers taken out through intermediaries by half a percent, while rates for borrowers who take out a mortgage with Halifax directly are being raised by an average of 0.35 per cent.

The move means a borrower with a 25 per cent deposit arranging a mortgage through a broker will now pay 6.39 per cent, up from 5.89 per cent previously, while someone with just a five per cent deposit will now have to pay 7.49 per cent - 0.49 per cent more than if they opted for the group's standard variable rate.

The group is also reducing the maximum amount people can borrow on a two-year fixed rate mortgage taken out through an intermediary from £7.5m to £500,000, although it will still lend larger amounts on longer-term products.

The move comes less than two weeks after Halifax repriced its entire mortgage range, increasing rates for people who wanted to borrow between 90 per cent and 95 per cent of their home's value by 0.35 per cent.

Today's move means someone with a £150,000 mortgage will have to pay an extra £47 a month or £560 a year on a two-year fixed rate deal taken out through a broker.

A Halifax spokeswoman said: "The pricing for the two-year fixed and tracker mortgages has increased significantly in recent weeks across the industry because of the cost of funding in the money markets.
"The difference between base rates and (inter-bank lending rate) Libor is 0.9 per cent, the highest gap for many months."

She added that the group had not increased the cost of its three, five and 10 year deals.

The rate hike comes only a week after the Bank of England's Monetary Policy Committee cut the official cost of borrowing by 0.25 per cent to five per cent, and just days after Prime Minister Gordon Brown called on lenders to pass on the reduction to borrowers.

Halifax's move is further bad news for first-time buyers and those coming to the end of short-term fixed rate and discount deals.

The group is the UK's largest mortgage lender with a 20 per cent market share, and other major lenders are likely to follow suit in raising their own rates, as lenders with deals that are too competitive quickly become swamped with more business than they can cope with.

Nationwide last week increased the cost of some of its fixed rate products for the second time in two weeks, raising them by between 0.12 per cent and 0.32 per cent, while Alliance & Leicester raised rates on its entire range by up to 0.35 per cent.