Barclays has announced it will hike variable mortgage rates by 0.25 per cent, while Natwest, RBS and Ulster Bank have pushed up tracker rates with immediate effect
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HOMEOWNERS are facing a bill-hike now that that the Bank of England has raised the base rate to 0.75 per cent - the highest its been in a decade.
The Royal Bank of Scotland, NatWest and Ulster Bank has put up its tracker rate mortgages with immediate effect, while Barclays will push up variable rates from September 1.
The nine-person Monetary Policy Committee voted unanimously to raise the base rate by 0.25 per cent, up from 0.5 per cent.
The base rate is now the highest it's been since March 2009 when it was drastically dropped following the economic crash.
But it means that the 3.7million borrowers who are on variable and tracker mortgages could see their monthly bills go up as lenders look to pass on the costs.
In fact, mortgage-holders could see their bills go up by as much as £264.
SOME banks have already increased their mortgage rates, minutes after the base rate rise announcement.
Here's what your bank did last time:
The base rate is set by the Bank of England and is used by banks and building societies as a guide to calculate interest rates - but they don't have to follow it.
Andrew Hagger, expert from , said: "A 0.25 per cent rate rise in isolation isn't going to push people over the edge financially, but combined with recent price hikes to council tax, petrol and energy bills, it's going to make balancing the budget a bigger headache for many families."
Charlotte Nelson, from , said rates for savers still have a "long way to climb".
In February, 2009 - the last time base rate stood above 0.5 per cent – the average easy access account paid 1.19 per cent, whereas now it pays just 0.53 per cent.
SIMPLY put, it’s the country’s official borrowing rate, and is the rate the Bank of England lends to all the other banks in the UK
It is incredibly important as it a guide for lenders on what rates it can offer – and therefore impacts mortgage rates, credit cards, loans and savings.
It was stuck at record low levels for a decade because of the state of the economy after the financial crash in 2008.
It was raised back to 0.5 per cent last November, but after today’s decision by the Bank has seen markets pencilling in more than three hikes within three years., starting later in 2018
Gillian Guy, boss of , said today’s move could "push more households into the red".
A rise is good news for savers though, who could see the amount of interest they earn on their cash go up - but only by a measly £25 on £10,000, if banks decide to pass them on.
The Bank of England tweeted that it raised the rate because inflation is above target, the "squeeze on pay is easing" and growth is around its speed limit.
If you're on a fixed-term rate then the rise won't change your repayments because you're already locked in to a deal.
You will only feel the effect of the hike when you come up to renew.
Variable rate and tracker mortgages follow the base-rate and can go up or down at any time - customers on those deals are likely to see their bills go up.
Hannah Maundrell from warns that now is the time to lock in to a fixed-rate mortgage as the rise could see bills go up as early as next month.
Mark Carney previously said there will be "something more than three" low rises over the next few years, which means it's only a matter of time before banks put up the prices.
Hannah added: "If you're on a variable rate mortgage and the Bank of England hikes interest rates today, you'll need to act fast to limit the damage.
"First check to see if you're on a variable rate and if you are, speak to a decent mortgage broker about your options ASAP.
"Hopefully you'll be able to switch to a cheaper deal and save a significant amount of money.
"You also need to speak to your lender and find out how much your monthly repayments will go up by.
HEATHER Dunk, 27, who lives in Manchester, fears that the base rate rise will mean a hike in her mortgage repayments - and affect any new deals that she hopes to lock in to.
Heather and her husband Nick, 32, switched their £58,000 fixed-rate mortgage to an SVR one with Lloyds back in October last year.
The couple are looking to move house and didn't want to pay any early-exit fees often charged when you leave a fixed-rate mortgage before the agreed time.
But it meant that they were immediately hit by high interest rates after the Bank of England raised them for the first time in a decade in November last year.
They currently pay 3.99 per cent interest but a 0.25 per cent rate rise will bring the amount they pay up to 4.24 per cent.
They’ve already managed to sell their house and secured a mortgage in principle for a new place but Heather has no idea if the offer still stands if there’s a base rate rise.
“We’re really struggling to get an offer accepted on a new house,” she told The Sun.
“Our monthly repayments have already jumped from £300 to £350 a month since we switched mortgages and that extra £50 is going on the interest.
“We’ve managed to get an agreement in principle for a three-year fixed-rate deal from Halifax for a new place but we’ve not paid to secure a rate yet so that could still go up by the time we actually lock in.
“When we looked it was around 1.99 per cent which is a decent rate but I don’t really know what will happen.
“Our monthly repayments will depend on what house we can get but we’re expecting them to go up to a around £850 because of the difference in house price.
“It’s depressing because anything extra we pay on that will just be going on interest.”
"If you can't afford to pay extra don't be a sitting duck; talk to them about your options so you don't end up over stretching your finances."
If the rate does go up by 0.25 per cent today, Yorkshire Building Society customers would be hit the hardest as a rise will see another £264 a year added to their bill.
Virgin Money and Coventry Building Society borrowers would see their annual bill go up by another £261 too.
The figures are based on a £150,000 mortgage over a 25 year term.
A rate rise would be great news for savers who could see the amount of interest they earn on their cash go up by another £25.35 a year - if they have £10,000 in the bank that is.
Okay, so that's not much at all and it's still a far cry from the days in 1990 when savers earned an impressive 14.675 per cent, but it's a step in the right direction.
Saving specialist from Calum Beanie said: "The Bank of England seems set to raise interest rates to their highest level in nearly a decade, but any increase will be largely symbolic.
"Savers will hardly see any impact because if banks and building societies decide to increase their rates, it will not be by a meaningful amount."
And she's right because the rates on £5,000 worth of savings would see a small £12.66 extra earned in interest.
And savers with £1,000 in the bank will only earn a meager maximum £2.53, if they have an easy access account with Virgin Money or Yorkshire Building Society.
Of course, this is all relying on the banks passing on the full 0.25 per cent rate rise to customers but an investigation by The Sun revealed that only one in 10 banks passed on the savings rates boost to customers.
SOME banks will pass on better interest rates to savers.
Post Office Money:
Virgin Money:
HSBC:
Metro Bank:
M&S:
TSB:
The Bank of England decided to raise the rate in November last year, to try to curb inflation by dampening demand in the economy by making the cost of borrowing more expensive.
WHILE tenants don't have mortgages, they could be exposed to rising rents.
Research from property investment firm Landbay suggests that landlords could be forced to pass on any increases they face in mortgage payments to their tenants.
It said while many experts expected rents to rise before now due to changes in buy-to-let rules, the number of cheap mortgages on the market meant landlords didn't need to pass on any increases.
But today's hike could "prove to be the starting gun on rapid rent increases," Landaby warned.
Overall the average cost of renting across the UK is £953 a month.
But those in London pay much more than the rest of the country - forking out £1,372 a month on average compared to those in Wales who pay just £634 a month.
On the news of the interest rate cut the pound dropped 1.5 per cent against the euro to 1.257.
It also fell by almost 1 per cent against the dollar.
After November's rate hike, based on a £150,000 mortgage over 20 years, customers on its Base Rate Mortgage will be paying £794 a month - an extra £18 a month or £216 a year.
On the same basis, those on the Standard Mortgage deal now pay £908 a month - an increase of £19 a month and £228 annually.
Mark Carney, governor of the Bank of England, hinted in February that the base rate was likely to go up in May this year.
But the bank's Monetary Committee voted by seven to two to keep the base rate the same.
In 2014, MP Pat McFadden dubbed the governor an "unreliable boyfriend" after falsely hinting that rates would rise.
Rates have been at a record lows for more than 10 years following the credit crunch, with the Bank using cheap borrowing as a way to stimulate the economy.
But savers have had a tough time of it, with low rates reflected in dismal returns on their savings.
Some money charities had warned the Bank against rising rates, with concerns that even a slight increase in the cost of borrowing could be too much for some households.
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