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Is your lender planning to increase your mortgage rate?

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Written by:
03/11/2017
We run through the major lenders, to see which will be passing on the rate hike to borrowers
Is your lender planning to increase your mortgage rate?

The Monetary Policy Committee confirmed today the Base Rate would rise from 0.25% to 0.5% –  it has been a decade since the last hike.

It was a move eagerly anticipated and while some commentators said it was a return to the norm, others said households across the country would feel the impact on their everyday bills.

When the Base Rate was cut to the unprecedented low last summer, banks were quick to lower the rates on savings products while homeowners on tracker and variable rates had to wait to feel the benefit.

But which banks are quickest and which are slowest to pass on the interest rate rise?

Your Mortgage’s sister title YourMoney.com contacted the UK’s largest providers and while many said the rate rise would take effect from December (for both savers and borrowers), RBS Group confirmed it has implemented the change while HSBC tracker mortgages need to brace for the rise from today.

Here’s what the providers told us:

Barclays

The Barclays Bank Base Rate and Standard Variable Rate will both increase by 0.25%. This will come into effect from 1 December 2017:

Barclays Bank Base Rate (BBBR) will increase from 0.25% to 0.50%
Barclays Standard Variable Rate (SVR) will increase from 4.74% to 4.99%
Barclays Buy to Let SVR will increase from 5.24% to 5.49%

For savers, it said it is “currently reviewing its savings rates and will provide more information in due course.”

HSBC Group (including First Direct and M&S)

HSBC announced it will increase tracker mortgage rates linked to the Base Rate by 0.25% from today. First Direct has increased tracker rates. On average, those with an HSBC/First Direct tracker mortgage with a £100k balance would see a monthly increase of £12 per month, and an increase of £24 for those with a £200k outstanding balance.

On savings, an HSBC Group spokesperson, said: “We regularly review our savings rates to take into account external factors like current market conditions. While our savings rates are not directly linked to the Bank of England Base Rate, we will be reviewing these in light of this decision and other factors, and will make our customers aware of changes in savings rates at the earliest opportunity.”

M&S recently announced it would launch a mortgage range. It said: “We recently announced plans to launch an M&S Bank mortgage range, but as they are expected to be available from early 2018, we don’t have any mortgage customers affected by the Base Rate decision. We will let you know if we change our savings rates.”

Lloyds Banking Group (Including Halifax)

All products that track the BoE Base Rate will be increased by 0.25% from December:

Halifax Homeowner Variable Rate currently at 3.74% will increase by 0.25% to 3.99%
Halifax Standard Variable Rate currently at 3.74% will increase by 0.25% to 3.99%
Lloyds Bank Homeowner Variable Rate currently at 3.74% will increase by 0.25% to 3.99%
Lloyds Standard Variable Rate currently at 2.25 will increase by 0.25% to 2.50%

It said: “We will be contacting all customers who will see a change to their monthly mortgage payment to let them know what this means for them. The group’s savings rates are currently under review, and any changes will be made in due course.”

Nationwide

Nationwide’s Base Mortgage Rate (BMR) and Standard Mortgage Rate (SMR) products will increase. It added that “these rates would remain competitive in the market at 2.5% and 3.99% respectively”.

Variable rates linked to the Bank Rate from Nationwide’s specialist lending subsidiaries, including The Mortgage Works, would also increase by 0.25%, reversing the change made as part of the August 2016 reduction. These changes come into effect from 1 December 2017.

It will increase savings rates by 0.25% for all savers who had their rates cut by 0.25% as a result of the Base Rate reduction in August 2016. This includes Loyalty Saver, Flexclusive ISA and children’s products such as Smart Junior ISA customers.

RBS Group

The Royal Bank of Scotland, NatWest and Ulster Bank North Base Rate has increased today from 0.25% to 0.50%. For those customers on Base Rate linked products (both mortgages and savings), it has increased rates to 0.50%.
Existing fixed rate product customers won’t see a change in their rate during their fixed rate period.

RBS said: “We are currently reviewing whether we will make any changes to Variable Rate products (savings and mortgages) and will provide an update in the near future.”

Santander

Santander said: “We are reviewing the pricing of all of our variable rates. If we make any changes we will communicate to these customers in line with their terms and conditions.”

All tracker mortgage products linked to the Base Rate will move in line with the change. It added: “These new rates will be communicated to customers and used to calculate mortgage repayments from the beginning of December.”
And for savers, it said all savings products linked to the Base Rate will move in line with the increase from the beginning of December.

TSB
Interest rates on TSB’s variable rate mortgage and Base Rate linked credit card accounts will increase by 0.25%.
Interest rates on variable rate savings accounts will increase by 0.15% (0.25% for the Young Saver).

TSB said: “In August 2016, TSB protected savers from the full Base Rate decrease by only reducing interest rates by 0.15%. We will be putting our customers’ variable rate mortgages and savings back to the position they were at before the Bank of England reduced rates last year.”

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