Tanya Powley, On Friday October 21, 2011, 6:07 am

More lenders have increased the cost of their mortgage rates this week, with brokers warning that rates have hit a floor and are likely to continue to increase in the coming months.

Woolwich, Santander and Northern Rock have announced rate rises across their mortgage range. Both Barclays (NYSE:BCS – News) Wealth and ING (NYSE:ING – News) Direct are also expected to increase mortgage rates next week.

Woolwich made some of the biggest changes, including raising the cost of its follow on rate – the rate at which borrowers revert to at the end of their mortgage deal – by 0.4 percentage points.

Other lenders have increased the cost of their standard variable rates (SVR). On Monday, Bank of Scotland for Intermediaries and The Mortgage Business – two brands within Lloyds Banking Group that closed to new business during the downturn – announced it was increasing its SVR from 4.84 per cent to 4.95 per cent on November 1.

Banks are blaming the rate increases on the rise in the cost of wholesale funding, which is being driven by concerns over the eurozone sovereign debt crisis.

This week, the Bank of England’s quarterly Trends in Lending noted that tight conditions in the interbank markets are starting to drive interest costs higher.

Mortgage brokers warned that those homeowners that are considering remortgaging should not delay in taking out a new mortgage as rates appear to have bottomed.

“I think the message for anybody thinking of changing their mortage is to act soon. Rates are unlikely to go lower,” says Ray Boulger of John Charcol.

Andrew Montlake of Coreco agrees. “It seems that we are now passing the nadir for mortgage rates which may spur some customers to take action before these historically low products disappear.”