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BankruptcyNews
Junior Member
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 Posted - 11 May 2007 : 13:47:24
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Mortgage lenders increase interest rates
Mortgage lenders announced an increase in the amount they charge borrowers today in response to yesterday's Bank of England interest rate rise.
Among the first out of the blocks were Nationwide and Portman building societies and the Royal Bank of Scotland with its One Account, all of whom said their standard variable rates (SVRs) would shortly be going up by 0.25% in line with the base rate rise.
The move was widely expected following yesterday's decision to increase interest rates to 5.5% - the highest in six years. Other banks and building societies are likely to follow suit and raise their mortgage rates in the coming days.
Nationwide, the UK's largest building society, said that from June 1 its base mortgage rate would go up from 6.74% to 6.99%.
It is likely to mean that households with a typical home loan of £100,000 will see their monthly bills rise by just under £16.
When added to the costs incurred by the previous three interest rate rises in August, November and January, it means mortgage repayments for the average homeowner will have increased by around £60.
Rob Clifford, chief executive of broker Mortgage Force, said the increase should act as a wake-up call for those currently on a lender's SVR.
"It is staggering that despite the number of mortgage deals available people are still on SVRs. Some people show an inane loyalty to their lenders," he said.
"People are missing out on £70, £80, even £100-a-month savings by not switching their mortgage. They would also achieve the peace of mind that their mortgage will be fixed for a number of years.
"I can only hope this interest rate rise will make people look seriously at their options."
SOURCE: Friday May 11, 2007
Guardian Unlimited
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Mortgage lenders increase interest rates
