What’s happened to savings and mortgage rates since the interest rate rise?

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Several banks and building societies have now said what will happen to their savings and mortgage rates after the Bank of England raised interest rates to 0.5%. Find out if your mortgage or savings account is affected.

What’s happening to savings rates?

As I write this, only a few banks and building societies have announced what they’ll be doing.

Barclays: Reviewing its savings rates.

Co-operative Bank: Hasn’t yet said what will happen to its savings rates.

Coventry Building Society: All variable rate savings accounts will rise by 0.25% from December 1st.

Halifax: Reviewing its savings rates.

HSBC: Says its savings rates are not directly linked to the Bank of England base rate, but it will be reviewing savings rates in the light of the interest rate rise – and other factors.

KRBS (Kent Reliance building society): It says that variable rates on savings accounts are not directly linked to the Bank of England base rate, but based on market and economic conditions.

Leeds Building Society: It says that most of its savers are on fixed rate accounts, so their rate will not change. It is reviewing other rates.

Lloyds Banking Group (includes Halifax, Lloyds and Bank of Scotland): Reviewing its savings rates.

Nationwide: Variable rate savings accounts will increase by 0.25% if they had a 0.25% cut in interest rates in August 2016, when the Bank of England reduced the base rate. This change will come in from December 1st. Some accounts which were protected when interest rates fell, plus business accounts, are under review. Interest rates on current accounts will not change.

NatWest: Reviewing its savings rates.

Newcastle Building Society: 0.25% increase in all variable rate savings accounts. This will take effect between November 6th and December 1st.

Post Office Money: Reviewing its savings rates.

Santander: No announcement so far.

Skipton Building Society: All variable rate savings accounts that are still open to new customers will have a rate increase of 0.25% from December 5th. All accounts that are no longer on sale to new customers will not have an interest rate of less than 0.5%.

TSB: All variable rate savings accounts will have an increase in their interest rate of 0.15%. When the Bank of England cut base interest rates in August 2016, interest rates on savings accounts were cut by 0.15%, so this reverses that change.

Yorkshire Building Society: All variable rate savings accounts will rise by 0.25% from December 1st.

If you have money in a fixed rate savings account, the interest rate will stay the same until the end of the term.

What you can do: If you have savings in a variable rate account, you should be told if the interest rate is going up (it’s not something banks and building societies are generally shy about!). It’s a good opportunity to see if you can get a better deal elsewhere. But I’d wait for a couple of weeks at least to give the banks a chance to announce what they’re doing about their savings rates. Check savings websites such as SavingsChampion, or price comparison sites such as Moneyfacts or GoCompare.

If you have money in a fixed rate savings account and you think you could do better elsewhere, check what the penalties are for closing your account. In some cases it may just be a few months’ interest and you may be better off moving your money.

Mortgage lenders’ standard variable rates

If you have a tracker mortgage, the interest rate will rise by 0.25% – either straight away or by the beginning of December. It’s less clear cut with standard variable rates (SVRs). Here are some of the standard variable rates of the major lenders (details correct at time of writing on November 2nd 2017 after the Bank of England interest rate rise. Changes from when we looked at this last year are in bold, though they are not necessarily linked to the rise yet).

Bank of Ireland: The standard variable rate is 4.24%.  It’s updating its website to reflect the Bank of England rate change but hasn’t announced a new rate yet.

Barclays: The standard variable rate is 4.74%, but the ‘revert to’ or follow on rate after a deal has run out (called the Barclays Bank Base Rate or BBBR) is 3.74% (Bank of England base rate plus 3.49%). Their standard variable rate will rise by 0.25% from December 1st.

Clydesdale bank: The standard variable rate is 4.70%. It hasn’t yet announced a change to its SVR.

Co-operative bank: The standard variable rate is 4.49%. It will increase to 4.79% from December 1st.

Coventry building society: The standard variable rate is 4.49%. Coventry building society say they will increase their standard variable rate to 4.74% on December 1st.

Darlington building society: The standard variable rate is 5.70%. It’s not yet said what may happen to its interest rate.

First Direct: The standard variable rate is 3.69%. First Direct say their SVR isn’t linked to the Bank of England Base Rate, or anything else. Instead they set the rate themselves.

Halifax: The so-called ‘homeowner variable rate’ is 3.74%. Halifax say they are raising their standard variable rate to 3.99% from December 1st.

HSBC: The standard variable rate is 3.69%. HSBC say they are reviewing their standard variable rate.

KRBS (Kent Reliance building society): The standard variable rate is 6.33%. If there are any changes in the interest rate, it will be announced in due course.

Leeds building society: The standard variable rate is 5.44%.  It says that most of its mortgage borrowers are on fixed rates, so their rate will not change. It is reviewing other rates.

Lloyds: The standard variable rate is 2.25%. Lloyds say their standard variable rate will rise to 2.50% from December 1st. It also has a homeowner variable rate, which is currently 3.74% and will increase to 3.99%.

Nationwide: The standard variable rate (also called the ‘standard mortgage rate’) is 3.74%. However, if you took out a mortgage on or before April 29th 2009, you’ll be on an interest rate of 2.25% (called the base mortgage rate) as long as you don’t remortgage to another Nationwide product. Nationwide say they will raise their standard variable rate to 3.99% on December 1st.

Natwest: The standard variable rate is 3.75% and this is the same as the interest rate you pay after a preferential deal ends. Natwest say their SVR is “under review”.

Newcastle building society: The standard variable rate is 5.99%. Their standard variable rate is not changing.

RBS: The standard variable rate is 3.75% and this is the same as the interest rate you pay after a preferential deal ends. I’ve checked their website today (4th November) and I can’t find any useful information about what will happen to their mortgage rates – just some general information explaining what interest rates are!

Saffron building society: The standard variable rate is 5.39%. It will not be increasing this rate following the Bank of England rate rise.

Santander: The standard variable rate is 4.74%, and the SVR for customers of Alliance & Leicester is also 4.74%. Santander say they are reviewing the Santander and Alliance & Leicester standard variable rates and if they make any changes, they will update their website and if your mortgage is affected they will write to you before your monthly payment changes.

Skipton building society: The standard variable rate is 4.70% and the mortgage variable rate (MVR) is 4.74%. Skipton say their SVR will stay the same.

TSB: TSB say their standard variable rate will be 2.50% from December 1st. They say it already takes into account the 0.25% rise.

Virgin Money: The standard variable rate is 4.54%, although some customers qualify for what’s called a ‘loyalty rate’, which is 4.29%. Virgin Money say they are currently reviewing their mortgage rates following the change in the Bank of England Base Rate. If your interest rate changes, they will write to you around two weeks in advance of any change to confirm your new monthly mortgage payment and your new interest rate.

Yorkshire bank: The standard variable rate is 4.70%. There’s no information yet about what they may do.

Yorkshire building society: The standard variable rate is 4.74%. Yorkshire Building Society say they’ll raise their standard variable rate by 0.25% to 4.99% from December 10th.

Related articles:

How to transfer a cash ISA

How many cash ISAs can you have in one year?

Compound interest explained

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