Two weeks on from the Base Rate increase– Moneyfacts.co.uk reviews the changes seen to date.
Andrew Hagger, Head of News and Press at moneyfacts.co.uk reviews the changes to date from both savings and mortgage perspectives.
Mortgages
“Fourteen days on from the decision to raise base rate by a quarter of a point, we have still only seen half of UK mortgage providers announce changes to their SVR, with some of the big players on the high street, namely Woolwich (Barclays), HSBC and NatWest still to decide.
“Last week we found that all SVR mortgage changes had matched the 0.25% rise; however this week there have been eight providers that have upped their rates by more than this figure, in some cases by as much as 0.35%.
“Whilst these increases will be bad news for consumers currently on a variable rate deal or on an extended tie in which will revert to SVR, when making comparisons between lenders it is important to look at the discounts offered.
“And while these larger increases may be deemed to be excessive, it is worth delving a bit deeper. Take for example two of the larger mortgage lenders, Nationwide and Britannia BS, which both increased their SVR by 0.35%. Even including the increase to their rates, their SVRs still fall below the Moneyfacts average mortgage rate, currently 6.55%. Additionally, both lenders’ variable rates are linked to base rate and therefore are not directly impacted by this 0.35% increase to the SVR.
Savings
“On the savings front another 16 institutions have increased their rates, but there are still another 74 still to announce their intentions.
“It is refreshing to see some providers such as Yorkshire BS, Norwich & Peterborough BS, Tipton & Coseley BS and Skipton BS have announced rate increases across their whole product range, rather than just on selected accounts.
“The competitive nature of the savings market has resulted in most providers passing on the full 0.25% increase to their savers. However a few providers have opted for smaller increases of 0.15% to 0.20%, making it increasingly important for savers to check the rates they are receiving.
“Yorkshire Building Society’s Internet saver has bucked the trend, raising its rates twice within a two week period to the total of 0.40%, and now pays a ‘best buy’ rate of 5.10%. Many other providers made cuts to their rates earlier this year.
“We have also seen a number of institutions that have announced higher rates for their borrowers, but as yet have not announced changes for their savings customers.”
NOTES TO EDITORS:
Moneyfacts Group
Moneyfacts is the UK’s leading independent provider of personal financial information and our data is used and trusted throughout the financial industry.
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