Poorer returns for a bit longer

While Halifax rushed out a 0.14% rise in its standard variable mortgage rate to 6.99% for new customers, savers will have to wait until later in the month to discover if their rates will rise by an equivalent amount. Northern Rock also upped its mortgage rate, by 0.16% to 7.05%, but apart from improving the savings rate on its base rate tracker account (by 0.25%), its other accounts remain under review.

Nationwide Building Society won kudos for its decision to leave mortgage rates on hold, but is cagey about what it plans for savings rates which are "under review". Even Virgin, usually the first to highlight dubious practices among the traditional banks and building societies, has held off improving rates for savers. Its savings rate will remain at 5.25% despite the fact that it is increasing the rate for borrowers by 0.25% to 6.45%, the same level as Nationwide.

The only bright news came for the 600,000 savers with Egg, which is duty bound by promises it made when it first launched to keep savings rates 0.5% ahead of base rate until January 1, 2000. Currently, it pays 5.5% on its basic savings account, which will have to rise to 5.75% to keep in line with its guarantee.

Meanwhile, carpetbaggers have been besieging Lambeth Building Society in the wake of Murray Financial's hostile bid for the Leek United Building Society. It is closing all accounts to new investors, except for its 5.8% cash ISA account, with will have a ?3,000 minimum balance.

9 September 1999
Mortgage war hots up