The majority of large mortgage lenders have now raised the cost of borrowing one month on from the Bank of England’s decision to raise its Bank Rate to 0.5pc.
Major lenders including Lloyds, Barclays and Nationwide have passed the cost of the increase onto customers by increasing their “standard variable rates” (SVRs) - also called reversion rates - which dictate what borrowers pay when fixed deals end.
Most lenders have raised their SVR by 0.25 percentage points in line with Bank Rate increase from 0.25pc to 0.5pc. For someone with a £150,000 mortgage and whose rate rose from 3.75pc to 4pc, this equates to an increase in annual mortgage payments of £252.
Those owing £300,000 would pay an extra £504 per year.
Standard variable rates (SVRs) are set at the lender's discretion. Unlike tracker mortgages, they do not have to rise and fall in line with Bank Rate - although historically most tend to do so.
Many SVRs are already far higher than the best fixed-rate deals currently available. For example, while the best two-year fixed rates currently charge around 1pc, SVRs are typically in the region of 4pc or higher. (See the best fixed rates available.)
Lloyds and Nationwide increased their SVRs by 0.25 percentage points to 3.99pc. RBS and NatWest increased their SVRs by 0.24 percentage points to 3.99pc. Barclays Mortgages’ SVR is now 4.99pc, up by 0.25 percentage points.
Some banks have not yet changed their rates, but plan to in the coming weeks.
These include Yorkshire Building Society, which will up its SVR by 0.25 percentage points to 4.99pc.
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Skipton Building Society is the only major lender that has said it won’t be passing on this rise in Bank Rate to its customers. But at 4.7pc, its SVR was already one of the very highest - and will continue to be so (see table).
The November rise in Bank Rate was the first in Britain in a decade and undid the decrease made a year earlier. Some mortgage experts have expressed concern that this could be the first in a series of rises.