Lisa Taylor, analyst at moneyfacts.co.uk, commented: “With only three months since the previous base rate increase, the dust has barely settled in the world of mortgages, and now it’s all change once again. Consumers have probably only made a couple of mortgage repayments at the increased rate following the August rise and now must brace themselves to pay out even more.
“Many of those customers who are on variable rate mortgages must be dreading the next couple of months, with the combination of a 0.50 per cent increase in mortgage rates, the cost of Christmas and the inflated winter utility bills soon to hit the doormat.
“The base rate rise last week was no real shock, and the MPC was probably hoping that consumers would have seen this coming and hopefully tightened their budgets accordingly. Also, as the rate was widely anticipated, it leaves little excuse for providers not to amend their rates sooner rather than later."
Mortgages
“Since last Thursday, 29 direct mortgage providers have increased their standard variable rates. All rates have been increased by the full quarter point, with the exception of Bath BS and Portman BS, which have opted for a 0.24 per cent rise, keeping their SVR just below the 7 per cent mark and Bank of Scotland which has increased by 0.35 per cent. The latter increase may appear excessive, but currently Bank of Scotland are only offering a few specialist discount products linked to SVR. That said, it will have an impact on their customers sitting on previous SVR products, and this increase should act as a wake up call to get them to look at finding a more competitive deal.
“The list also includes two of the larger mortgage lenders, Nationwide BS and Halifax, whose SVRs stand at 6.49 per cent and 7 per cent respectively. With these early announcements, often seen as the benchmark within the industry, it shouldn’t be too long before we see more lenders following their lead.
“While there have been more lenders amending their rates within the first week compared with the August rise, we would have expected a slightly faster response, with lenders able to plan for this latest adjustment, as well as it being in their own financial interest to raise borrowing rates at the earliest opportunity.
“For those consumers still paying their lender’s standard variable rate, and many now hitting 7 per cent, this latest rise may spur them to search the market for a better deal. Still, many fixed and variable rates are available around 5 per cent, so for an average mortgage of £150,000, a monthly saving of over £180 can be obtained."
