Mortgage lenders pass on interest rate rise

Barclays today became the latest lender to announce it was increasing mortgage rates following the recent hike in interest rates.

The group, which includes Barclays and The Woolwich, said it was passing on the full 0.25% to borrowers, increasing its standard variable rate to 6.79% from September 1.

It said the move would cost someone with a ?100,000 mortgage an extra ?15.73 a month, increasing monthly repayments to ?693.44.

The group has also increased the rate paid on its tracker savings accounts, although the interest paid on other savings accounts remains under review.

The majority of the major lenders have now announced they will be increasing their mortgage rates following last week's hike in the cost of borrowing.

Abbey said it was increasing its standard variable mortgage rate by 0.25% to 6.75% within hours of the Monetary Policy Committee's announcement.

It was followed the next day by Cheltenham & Gloucester, part of the Lloyds TSB group, and HSBC, while Britain's biggest mortgage lender Halifax and Nationwide building society both announced they were increasing their rates this week.

But other banks, including the Royal Bank of Scotland and NatWest, Northern Rock and Alliance & Leicester, were still reviewing their rates today.

The rise in rates means someone with an average ?65,000 mortgage will pay just over ?10 a month more at ?449.09, based on a new rate of 6.75%, while someone with a ?100,000 mortgage will have to find an extra ?15 and someone with a ?200,000 home loan will pay ?31 a month more.

Homeowners have now seen cumulative rises of, on average, ?50 a month on a ?65,000 mortgage since November last year, while those with a ?200,000 mortgage have seen increases of more than ?150 a month.