Customers wait on rate adjustments

Many borrowers and savers are still waiting to find out if they will be affected by this month's base rate rise, more than two weeks after the Bank of England made its announcement.

The decision to raise interest rates by 0.25% to 4.75% has so far prompted only half of mortgage lenders and fewer than a quarter of the UK's savings providers to adjust their rates, according to financial information provider Moneyfacts.

Among the big mortgage lenders, Halifax and Nationwide building society have announced rate increases, but Woolwich, HSBC and NatWest have yet to say if customers will face higher borrowing costs.

While some lenders have opted to pass on just the 0.25% rise - among them Halifax, Cheltenham & Gloucester and Abbey - eight have increased their rates by more.

Those who have opted for the biggest rise, adding 0.35% to their mortgage rate, are Nationwide, Britannia building society and National Counties building society.

Other lenders increasing rates by more than 0.25% are Harpenden building society and Ulster Bank (0.27% each), and NatWest, Royal Bank of Scotland and West Bromwich building society (0.30% each).

Mortgage rates

Mortgage rate rises, which will affect all customers with home loans linked to a lender's standard variable rate (SVR), have for the most part already come into effect for new borrowers, but some lenders are delaying increasing the amount paid by existing borrowers.

First Direct was the quickest to pass on the rate rise to its customers, increasing its SVR by 0.25% to 5.75% with effect from August 3, with Direct Line and First Active following suit the next day.

But customers of most big lenders will not see rates go up until September 1.

Andrew Hagger, a spokesman for Moneyfacts, said consumers should remember to compare the rates on offer, rather than just looking at how much they were set to rise by.

"While these larger increases may be deemed excessive, it is worth delving a bit deeper," he said.

"Take, for example, two of the larger mortgage lenders, Nationwide and Britannia, 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, which is currently 6.55%.

"Additionally, both lenders' variable rates are linked to the base rate and therefore are not directly impacted by this 0.35% increase to the SVR."

Savings providers

Moneyfacts also said just 16 out of 90 savings providers had so far announced rate increases, which means many of those who have announced mortgage rate rises are yet to pass on the increase to savers. Nationwide is among them, as is Northern Rock.

A spokeswoman for Nationwide said the savings rates were still under review, but that any change would come into effect on the same day as the mortgage rate change.

Many of those who have made announcements have focused on a limited number of accounts.

Halifax, for example, has only announced a rate rise on its Guaranteed Saver account, while Lloyds TSB, which has upped mortgage rates on its C&G brand, has only increased the savings rate on its Guaranteed Tracker.

In contrast, some lenders have raised rates across the board. Norwich & Peterborough building society, for example, has added 0.25% to its mortgage rate and increased rates on savings accounts by at least as much - on its Easy Plus account the rate has been increased by 0.35%.

National Savings & Investments is passing on the full 0.25% rise to savers with Isas and variable rate savings accounts, including its income bonds and Ordinary account.

It is also increasing the premium bond prize fund from an amount representing an effective interest rate of 2.95% to 3.15% a year. However, the odds of winning a prize will remain at 24,000 to one.

Some of the changes will take effect immediately, but premium bond holders and savers with a Direct Isa or Ordinary account will not benefit from the increases until September 1.

Commenting on savings rates, Mr Hagger said: "It is refreshing to see some providers such as Yorkshire, Norwich & Peterborough, Tipton & Coseley and Skipton building societies 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."

Mortgage rate changes for existing customers:

Abbey: standard variable rate (SVR) up 0.25% to 6.75%. Effective from September 1.

Cheltenham & Gloucester: SVR up 0.25% to 6.75%. Effective from September 1.Tracker mortgage rates up 0.25%. Effective from September 1.

First Active: SVR up 0.25% to 5.85%. Effective from August 4.

First Direct: SVR up 0.25% to 5.75%. Effective from August 3.Tracker mortgage rates up 0.25%. Effective from August 3.

Halifax: SVR up 0.25% to 6.75%. Effective from September 1.Tracker mortgage rates up 0.25%. Effective from September 1.

HSBC: no decision on SVR yet.Tracker mortgage rates up 0.25%. Effective from August 4.

Nationwide: SVR up 0.35% to 6.24%. Effective from September 1.Tracker mortgage rates up 0.25%. Effective from September 1.

Northern Rock: SVR up 0.25% to 6.84%. Effective from September 1.

Royal Bank of Scotland: SVR up 0.30% to 6.89%. Effective from August 14.