As the UK’s mortgage market crisis protracts two more major lenders have announced they are increasing their rates for new customers. And Egg, the online bank owned by Citi, said it was pulling out of the mortgage market.

Bradford & Bingley (B&B) said it was hiking interest on a range of deals by about 0.55 per cent, just as Abbey is introducing new rates, raised by 0.26 per cent, from today.

The decision, according to reports, comes amidst continued rise in the cost of wholesale funding, with Swap rates, on which fixed rate mortgages are based, recently rising by 0.6 per cent.

B&B is increasing it rates on standard residential, buy-to-let and self-certification mortgages by between 0.05 per cent and 0.55 per cent.

The move, it explained, was part of its normal business activity that in the last 18 months saw it repricing its mortgages on a monthly basis.

Monday’s announcement that it had incurred a pre-tax loss of £8 million in the four years to the end of April after suffering a further £89 million hit from credit crunch and a £36 million charge from increasing arrears had nothing to do with the rate hike, the lender claimed.

The changes will now raise the fee paid by someone with a two-year fixed rate loan with a 75 per cent deposit by 0.2 per cent to 6.49 per cent.

Abbey raises its rates by between 0.07 per cent and 0.26 per cent on a range of its products, including those for customers with just a 15 per cent deposit and its five-year fixed rates loans.

Meanwhile, Egg, which has 27,000 mortgages – less than 1 per cent of the market – said it may not offer customers new products once their fixed-term deals ended.