HALIFAX, Britain’s biggest mortgage lender, has emerged as the worst offender in a survey of how banks and building societies have treated borrowers in the credit crunch.

It has raised rates on two-year tracker deals by up to 1.15 points since the start of the credit crunch in August – more than any other lender, despite three cuts in official interest rates from 5.75% to 5%.

Halifax’s latest blow to borrowers came last week, when its parent, HBOS, increased rates across the group – which includes Bank of Scotland and Intelligent Finance. Halifax has increased rates five times this year and its latest move raised some rates by 0.6 percentage points.

The move was in defiance of a plea from Alistair Darling, the chancellor, for lenders to pass on the Bank of England’s £50 billion bailout of the mortgage industry last week.

Rates for new borrowers at Intelligent Finance increased by up to 0.5%. Halifax also lifted its arrangement fee on deals through brokers by up to £1,000 to £1,499 in some cases. The move has left the lender open to accusations of profiteering and raised questions about its funding.

Simon Tyler of broker AWD Chase de Vere said: “Halifax is trying to discourage business while at the same time boosting its profit margins. By driving up its rates it ends up making more money from less borrowing. Borrowers have got to seek out better deals if they are out there.”

In August 2007, Halifax was offering remortgagers with 25% equity in their homes a rate of 5.59% for a two-year tracker. Today, the rate is 6.74% – a jump in repayments of 1.15% or £142 a month.

However, Libor – the rate at which banks lend to each other in the money markets and which is used as the basis for trackers – has come down from an average of 6.41% in August to 5.8% this week.

The last time Halifax put up the cost of its mortgages was April 15, the day after lenders were called to Downing Street to discuss getting the mortgage market back on track.

Royal Bank of Scotland was the second-worst offender in our survey by financial data provider Moneyfacts.

The bank, which is seeking to raise £12 billion from investors, has increased the rate on trackers for those with 25% equity in their homes since the start of the credit crunch from 5.49% to 6.44% – an increase of £116 a month on a £200,000 loan.

Borrowers will find little shelter from building societies. The Moneyfacts survey looked at two-year trackers and fixes from Britain’s top 10 lenders as well as Britannia and Yorkshire building societies, for purchases and remortgagers.

Britannia, which was described by Royal Bank of Canada analysts this week as “the Achilles’ heel of UK building societies”, has increased rates on its two-year fixes from 5.69% to 6.54% since August.

A Nationwide borrower with 25% equity would have paid 5.48% for a two-year tracker in August – now they will pay 6.25%, a monthly increase of £93 on a £200,000 loan.

Ray Boulger of broker Charcol said: “There is absolutely no point in remortgaging on to a two-year deal with Nationwide or Halifax when many of their rates are above their standard variable rates.”

While new borrowers and remortgagers have been hit, most lenders are so far playing fair with existing customers – the top 10 lenders have all cut their standard variable rates (SVR) by 0.25% since the Bank of England cut rates this month.

However, 48 out of 99 have still to announce changes, including Intelligent Finance, Yorkshire building society, Clydesdale Bank, Egg, Coutts, Heritable, ING Direct and Kent Reliance, RBS One Account, Principality, Stroud & Swindon and Standard Life.

Bradford & Bingley emerged as the best performer in the survey. It has cut rates on its two-year tracker and fixes since August, and does not charge fees on its fixed-rate deals.

Boulger said: “Bradford & Bingley is able to control the amount of business it does because it lends through branches only. If it was placing business through brokers it would have had to increase its rates a long time ago.”

Brokers said rates were now so high it may not be worth remortgaging at all.

Richard Morea of L&C, a broker, said a borrower with a £50,000 mortgage would be £223 better off on Nationwide’s SVR at 6.49% than if they remortgaged for a year on to HSBC’s lifetime tracker at 5.48% with a £599 fee.

For those with larger loans, finding a “cheap” tracker with no early redemption penalties is a better option for riding out the credit crunch, as discovered by Lindsay and Andrew Millward, of Kegworth, near Derby.

The couple, who both work in marketing, took out a two-year tracker deal with Royal Bank of Scotland in May 2006 at 4.25% – the rate is now 4.75%. They booked a deal at 5.58% with Cheltenham & Gloucester before their term expires on June 1 and will face a £92 jump in their monthly repayments.

Lindsay said: “While the rise in repayments is not ideal, the deal suits us because there are no penalties, so if the market improves and a better deal comes along we can switch.

“In the meantime, it’s a tracker deal so we will benefit from any further interest-rate cuts.”

However, such deals are disappearing fast. Morea said: “The Millwards were fortunate to have secured this deal as it was withdrawn the day after we booked it.”

He added: “Borrowers need to take into account that remortgaging on to a tracker or any other deal in the short term will incur an arrangement fee – you may then have to pay another set of fees if you decide to switch.”

Brokers said last week that they did not expect rates to improve for at least six months.