Last week the Bank of England increased its base rate by a quarter of a percent, to 5.75%. With twenty-four hours some providers had announced changes to their mortgages, and this week the banks and building societies will begin to change their rates to keep up. No doubt the cost of borrowing will go up first – within days – and savings rates will follow on – probably at the beginning of August.
Indeed, some smaller lenders have already added 0.25% to their standard variable mortgage rates. To go with this, some savings account providers have actually raised savings rates by 0.25%, but not on all accounts.
There is a usually a delay in the process as financial institutions take stock, and the biggest organisations will hold board meetings over the next two weeks to decide how they are going to follow suit. In fact, many banks and building societies started to pull fixed rate deals even before the quarter point rise was announced, so there is little chance for anyone to take advantage of left-over deals. Quick to follow the Bank of England’s decision, the Bank of Ireland pulled its complete fixed-rate mortgage range on the same day.
Those mortgages that are linked to the Bank’s base rate, such as tracker mortgages, will have had their rates changed immediately as that is precisely what they are designed to do. In addition to those, 12 lenders have already announced an increase to their standard variable rate or on specific deals.
Examples of these are Royal Bank of Scotland, Tesco Mortgages, online bank Egg, and Portman Building Society – currently merging with Nationwide.
It is good to see that some savings rate increases have also been announced by Halifax, Lloyds TSB and Northern Rock – all offering the full 0.25% – but the savings increases have only been applied to selected accounts.
Tags: mortgage, finance, banks <BR/>Related posts:
Leave a Reply