Mortgage lenders Bradford & Bingley, First Direct and the Co-operative Bank have all raised the cost of their fixed-rate home deals. B&B's move comes as other mortgage lenders, including Abbey, Nationwide and Alliance & Leicester, also put rates up in response to rising costs on the money markets.

The move by Bradford & Bingley, which is its second increase in just under three weeks, sees the cost of its residential fixed-rate loans rise by between 0.5% and 0.7%, while its lifetime variable mortgage rate has risen by 0.1%. It also increased its buy-to-let deals by 0.3% and its fixed-rate self-certification mortgage rates have soared by 0.95%.

A homeowner coming off the average two-year fixed rate deal taken out in June 2006 would be paying a rate of 5.05%, according to Council of Mortgage Lenders figures.

The move comes as banks find it harder and more expensive to finance loans. They have been caught up in a global credit crunch, which has marked the end of cheap loans and easy lending which had become the norm over the past decade.

Faced with slower global economic growth, quickening inflation and weakening property markets, banks are tightening their lending requirements and lifting the rates at which they offer mortgages.