The six banks putting up mortgage rates within WEEKS – and how to avoid paying hundreds more

MORTGAGE costs will rise for many homeowners after the Bank of England put up interest rates.

The central bank hiked the base rate by 0.25 percentage points – and many banks and building societies will be passing that on to borrowers.

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You won’t pay more if you’re on a fixed rate mortgage deal, as you’ve agreed your rate for a certain period of time.

But after your deal ends, you could find rates are higher than when you last fixed because of the latest hike.

For homeowners with a tracker mortgage linked to the base rate, your repayments will rise, but when this happens will depend on your lender’s terms and conditions.

Some mortgage lenders have said they will increase standard variable rates (SVR) and others are “reviewing” theirs after the Bank of England’s (BoE) decision.

SVRs are generally higher than fixed rate deals, so if you’re on one then you’re likely already be paying more than you need to.

And if your bank is putting up the SVR, you’ll soon be paying even more unless you find a cheaper deal, which could cost you hundreds of pounds a year extra.

Homeowners have been warned they should check their mortgage deal sooner rather than later to make sure they are getting the best deal, as the BoE is expected to hike rates further this year.

Here we explain what each bank is doing and how to get the best deal.

For rates that are rising (excluding tracker mortgages), we’ve given how much this could add to your repayments based on a £200,000 25-year mortgage.

But the exact amount will depend on the size and length of the mortgage you have, so for example if you’ve borrowed more, the repayments rise will be higher.

You can use broker L&C Mortgages interest rate calculator tool to see how much a rate rise could cost you.

Aldermore

Aldermore has said that it’s SVR, known as the Aldermore Managed Rate (AMR), is rising by 0.25% from March 1 for existing customers.

That means the rate will go from 4.73% to 4.98%.

On a £200,000 25-year mortgage this increase will add £29 a month to repayments – or £348 a year.

Customers who have a mortgage linked to the BoE rate will find their rate will go up by 0.25% from March 1 too.

Barclays

Barclays has said it will increase its standard variable rates by 0.25% from March 1.

That means that it’s current rate of 4.74% will rise to 4.99% for homeowners.

On a £200,000 25-year mortgage this increase will add £29 a month to repayments – or £348 a year.

Those with a buy to let mortgage will see the current SVR of 5.24% rise to 5.49%.

We’ve asked Barclays when the rate change will come into affect for tracker mortgage customers and will update when we hear back.

First Direct

First Direct told The Sun there is no immediate or automatic increase to rates that are not linked to the BoE base rate.

But it is keeping its rates under review and if there is any change to the SVR (currently 3.54%) it will let customers know.

For those on mortgages linked to the BoE base rate, the change comes in on the same day.

That means those with a tracker mortgage will see their rate has already gone up by 0.25%.

HSBC

At HSBC it’s a similar story – First Direct is owned by HSBC.

Tracker mortgage customers will see their rate has gone up by 0.25% today.

There’s no immediate or automatic link between other rates and the BoE base rate and it’s SVR will remain at 3.54%.

The bank is keeping mortgage rates under review though.

Leeds Building Society

Leeds Building Society said it’s continuing to review the impact of the rate change.

It said: “As a building society, it’s important for us to balance the needs of savers and borrowers, and we’ve worked hard in this low interest rate environment to offer long-term value to both.

“The majority of Leeds Building Society borrowers are on fixed rate products therefore their rates will remain the same until their fixed periods end.

For now that means Bank of England tracker accounts will change with the rate rise.

For most that will apply within 24 hours of the BoE rate change, but for some it applies from the first day of the following month, so check your terms and conditions.

Lloyds, Halifax and Bank of Scotland

Lloyds Banking Group, which owns Lloyds Bank, Halifax and Bank of Scotland, said some rates are changing.

Halifax’s Homeowner Variable Rate and SVR will both rise, from 3.74% to 3.99% from March 1.

Lloyds Bank Homeowner Variable Rate will rise too from 3.74% to 3.99% and Lloyds’ SVR will rise from 2.25% to 2.50%, also on March 1.

For mortgages linked to the BoE base rate customers’ rate will rise by 0.25% from March 1.

Metro Bank

Metro Bank said it’s “currently assessing our variable rate products”.

It said: “In line with the Bank of England increasing the base rate to 0.5% from 0.25%, we’re updating all mortgage products that track the Bank of England’s base rate.”

These tracker rates will change immediately.

The bank said that customers will be told of any rate change online and in branches.

Nationwide

Nationwide is putting up its rates by 0.25% from March 1.

That includes its Base Mortgage Rate (BMR) which will increase to 2.5%, and its Standard Mortgage Rate (SMR) which will rise to 3.99%.

On a £200,000 25-year mortgage this increase will add £25 a month to repayments – or £300 a year, for BMR.

For SMR, the extra is £27 a month or £324 a year.

Tracker mortgage rates will also rise by 0.25% from March 1 too.

Natwest

We’ve asked Natwest if there are any changes to mortgage interest rates and will update when we hear back.

Santander

Santander has said that tracker rates will rise by 0.25% – we’ve asked when that’s from and will update when we hear back.

Santander Follow on Rate (FoR), which is a variable rate you revert to automatically after the end of a previous term, will increase to 3.75%.

On a £200,000 25-year mortgage this increase will add £27 a month to repayments – or £324 a year.

The banks said that the new rate will apply to repayment calculations from the start if March, and customers will be told before this starts.

The SVR at the bank, and at Alliance and Leicester will rise to 4.74% from the start of March.

For the same mortgage amount and term, it will add £29 a month to repayments or £348 a year.

Skipton Building society

Skipton Building Society said it is looking at how the BoE base rate rise will impact mortgage rates.

It added that it will keep customers updated on its website skipton.co.uk.

TSB

We’ve asked TSB if there are any changes to mortgage interest rates and will update when we hear back.

Virgin Money

Virgin Money customers on tracker rates will see a rise of 0.25% from April .

For Clydesdale and Yorkshire Bank customers the tracker rate will also rise, but from their their next payment date.

The bank said it is reviewing its SVR.

Yorkshire Building Society

A spokesperson for Yorkshire Building Society said it is “considering the impact on our standard variable rate mortgage and saving accounts”.

Tracker mortgage customers will see a rate increase of 0.25%. When the rise takes place will be in the terms and conditions of your loan.

Tips for getting the best mortgage deal

Getting the best rate on your mortgage can depend on the rates available at the time, but there are several ways to land the best deal.

Usually the larger the deposit you have the lower the rate you can get.

If you’re remortgaging and your loan to value ratio has changed this could also give you access to better rates than before.

A change to your credit score or a better salary could also help you access better rates.

If you’re on an SVR, fixed deals are likely to be cheaper, so it’s worth looking at the the options out there.

If you have a fixed rate, you could see higher rates when you come to the end of the current term after the BoE rise., either when shopping for a new fixed deal or reverting to the standard variable rate (SVR).

But if you’re nearing the end of a fixed deal soon it’s worth looking now. You can lock in current deals sometimes up to six months before your current deal ends.

Leaving a fixed deal early will usually come with an early exit fee, so you want to avoid this extra cost.

But depending on the cost and how much you could save by switching versus sticking, it could be worth paying to leave the deal but compare the costs first.

To find the best deal use a mortgage comparison tool to see what’s available.

You can also got to a mortgage broker who can compare for you, but you may have to pay for this service.

It could cost a couple of hundred pounds but it might save you thousands on you mortgage overall.

You’ll also need to factor in fees for the mortgage, though some have no fees at all, or you can add it on to the cost of the mortgage, but beware that means you’ll pay interest on it and so will cost more in the long term.

You can use a mortgage calculator to see how much you could borrow.

Remember, that you’ll have to pass the lender’s strict eligibility criteria too, which will include affordability checks, and looking at your credit file.

You may also need to provide documents such as utility bills, proof of benefits, your last three month’s payslips, passports and bank statement.

This post first appeared on thesun.co.uk