HAVEN MORTGAGES, the subsidiary of EBS Building Society which sells home loans through brokers, is increasing the rates on some of its residential mortgages, but reducing the cost of some of its buy-to-let mortgages for investors.

The company told mortgage brokers it was raising its two-year fixed rate for home loans by 0.15 of a percentage point from 5.14 per cent to 5.29 per cent and its three-year fixed rate by 0.14 of a point from 5.04 per cent to 5.18 per cent.

However, Haven is reducing its three-year fixed rate for investors by 0.14 of a percentage point to 5.35 per cent and its five-year fixed rate for investors by 0.1 point to 5.5 per cent. The changes come into effect on June 5th.

Kieran Tansey, associate director of Haven, said the higher wholesale cost of funding was the reason for the increase in the residential mortgage rates. He said the company had held off raising its rates "almost artificially as long as possible" and had hoped "to retain our competitive position as long as we possibly could".

He said Haven had seen an opportunity to reduce mortgage rates on some of its loans to investors, which was bucking the general upward trend on mortgage rates. "Unfortunately we couldn't hold off on the residential side."

The cost of three-month wholesale money in euro has remained unchanged at its current high level of 4.86 per cent - or 0.86 of a percentage point above the European Central Bank rate of 4 per cent - for the last four weeks.

This compares to a margin of 0.15 of a point before the credit crisis began last year.