Business

TSB, Barclays and more banks raise mortgages as 2million hit by rate hike

Banks including HSBC, TSB and Santander have hiked mortgage rates to take advantage of the Bank of England’s surge, adding £50 a month to the cost of a typical £250,000 loan

Brits walk past an HSBC branch
The bank will try to replace closed branches with other services

Around two million mortgage borrowers face higher monthly repayments after the Bank of England raised interest rates from 0.75% to 1% on Thursday.

Those with variable deals could see interest costs rise by an average of £25 a month, UK Finance said.

The Banking Authority based the figure on the average account balance of £121,034, but borrowers who have more debt will see fees rise even further.

Around two million people in the UK have adjustable rate mortgages. There are two types: “Tracker” and “Standard Variables”.

Tracker mortgages rise and fall according to changes made by the Bank of England. Standard variable products follow the interest rate of the bank that originated the loan – most banks are expected to top up these products in line with next month’s rate hike.







Last night, TSB became the first lender to confirm it will fully pass on higher interest rates
(

Picture:

Chris Ratcliffe/Bloomberg/Getty Images)

TSB was the first lender to confirm last night that it would pass on the higher rates in full.

Customers with variable standard and variable homeowner mortgages would increase payments by 0.25 percentage points starting in June.

Currently, TSB’s floating rates are 2.74% and 4.74%, respectively, and will increase to 2.99% and 4.99%, respectively.

The lender said it is reviewing rates on the rest of its businesses, including its fixed-rate mortgages and savings accounts.

A spokesman said: “Interest rates on our adjustable rate mortgages will rise by 0.25%, in line with previous increases and decreases in the base rate, which we have passed on in full.” It added that the vast majority of customers are fixed though offers.

HSBC hiked the price of tracker deals by 0.25 percentage points this morning, effective immediately. It said it would “review” its default variable and savings accounts.

His standard variable mortgage currently costs 4.04%.

Barclays will increase its standard floating rate from 5.24% to 5.49% next month. Trackers will also go up next month.

Nationwide said tracker mortgages will rise by the full rate hike on June 1. Savings accounts and variables will continue to be checked.

Santander confirmed its tracker mortgages would rise to 4.25% on June 3. Clients with variable rates at Alliance & Leicester, part of Santander, will see their payments rise to 5.24%.

The Coventry Building Society said it will hike rates on most of its variable savings accounts from June 1.

Lloyds, which also owns Halifax and Bank of Scotland, said tracker mortgages would rise by the full increase on June 1. Variable deals are still under review.

First Direct raised its trackers this morning (May 6) but said variable deals are under review. The Yorkshire Building Society said trackers will go up on June 5.

The latest rate hike will add more than £50 a month to the cost of a borrower with a £250,000 mortgage paying the average variable rate of 3.3%.

However, the three-quarters of fixed-rate mortgage borrowers are unaffected.

We have a complete guide on what the hike in interest rates means for you here.

Thursday marked the fourth straight rate hike and the highest since 2009, when the bank slashed borrowing costs to combat the financial crisis. It was also the first rate hike on an election day since 2004.

Bank of England Governor Andrew Bailey said this should ultimately help bring inflation down in the years to come – it aims to keep it at 2% but warned they could hit 10% for the first time by Christmas could.

Markets expect interest rates to hit 2.25% by the end of the year, with households being advised to repair where possible to save on mortgages.

A Treasury spokesman admitted the government could not “completely protect everyone” from the impact of the cost-of-living crisis.

He added: “Britain is not alone in facing these challenges and while we cannot fully shield everyone, we are taking action to ease the pressure on budgets and spur growth. We remain focused on investing in people, capital and ideas to improve living standards over the longer term.”

Natwest has also been contacted for comment.

Continue reading

Continue reading

https://www.mirror.co.uk/money/tsb-barclays-more-banks-hike-26889548 TSB, Barclays and more banks raise mortgages as 2million hit by rate hike

Fry Electronics Team

Fry Electronics.com is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – admin@fry-electronics.com. The content will be deleted within 24 hours.

Related Articles

Back to top button