Mortgage rates raised by some lenders

Following the fourth interest rate rise in the space of nine months, which was announced by the Bank of England just days ago, a number of lender have already hiked up the rates on their mortgages, with other expected to following in the very near future.

Amongst those that have already applied the interest rate rise are the Cheltenham & Gloucester, the Bradford & Bingley, and the Nationwide. The interest rate was hiked up to 5.5 percent last week, having already gone through three quarter percent rises since last August.

Although a number of banks and lenders have been quick to apply the interest rate rises on borrowing, many have been criticised for failing to apply the interest rate rises quickly enough when it comes to savings. However, there are some lenders and banks that will also be applying the new interest rate to savings in the very near future, which is good news for some savers, although many others may not see their savings rate go up till June – if at all.

Since the announcement of the latest interest rate rise, thirteen mortgage providers in total have already applied the new rate to borrowing. Twenty-two savings account providers have also raised the interest rates for their savers since the Bank of England announced the interest rate rise.

One spokeswoman from Moneyfacts stated: "Most of the savings rates products that have moved are linked automatically to the BoE base rate."

She also added: "Some account providers have moved a little more quickly than we would usually expect. However, many of the rate increases, although announced now, are not coming into force until June."

Tom Smith
25.05.07