Financial turmoil in the eurozone is already forcing up the cost
of mortgages. What will this mean for borrowers in 2012 1 Why
are rates rising? Mortgage deals are largely determined by the
wholesale rates that banks charge each other, rather than the
base rate set by the Bank of England. Concerns about the
sovereign debt crisis in the eurozone means that the
availability of funds is shrinking, which pushes up the cost of
borrowing on the wholesale markets. Three-month Libor, the
interbank rate that governs the wholesale cost of borrowing to
fund new mortgage lending, reached 1.06 per cent this week, up
from 0.76 per cent at the start of the year. High street lenders
are now passing those costs