Barclays raises mortgage rates

Barclays today became the latest lender to announce it would be passing on last week's hike in interest rates to its borrowers.

The group announced that both Barclays and The Woolwich would be increasing their standard variable mortgage rate by the full 0.25% to 6.54% for new and existing borrowers from July 1.

The move will cost someone with a ?75,000 repayment mortgage an extra ?11.67 a month.

Abbey National and First Direct both said they would be increasing their mortgage rates by 0.25% on the day the Bank of England's monetary policy committee announced it was raising rates to 4.5%.

They were followed by Nationwide and Cheltenham & Gloucester, part of Lloyds TSB, on Friday. But other lenders, including the UK's biggest mortgage lender Halifax, HSBC, and NatWest and Royal Bank of Scotland, were still reviewing their rates today.

Mortgage adviser Clear Cut Mortgages said the rate rise would mean repayments for someone taking out a new mortgage would rise to an average of 33% of gross pay, the highest level since 1993, and up from 29% last year.