Halifax is raising its standard variable rate (SVR) from 3.5% to 3.99%, affecting 850,000 home owners.
Around 54,000 Co-operative Bank customers will see SVR rates go up by 0.5% to 4.74%, meaning payments will typically increase by £15 a month, or £180 a year.
Clydesdale and Yorkshire Banks SVR rate will rise from 4.59% to 4.95%, affecting 30,000 customers, whose payments will typically go up by less than £30 a month.
RBS-Natwest is also pushing up the rate on its One Account, a non-SVR product, by 0.25%, affecting around 100,000 customers. For the majority of these customers, the new rate will be 4%.
– James Moss, MD of Curzon Investment Property
This is a kick in the groin for homeowners. It’s bad news for two reasons: firstly, a rise of half a percent in repayment rates equals a 12.5percent rate hike on a 4 percent mortgage. At a time of rising energy prices and food bills, this will hit people hard. Secondly, those borrowers who are already on the verge of falling behind couldbe tipped over the edge or boxed in from being able to remortgage onto a better deal if they’re already in negative equity.
More than a million home owners will see the cost of their mortgage payments rise from today.The majority of those affected are Halifax customers, who could typically find themselves paying nearly £200 extra a year, following a series of recent rate rise announcements from lenders.
The Co-operative Bank, Clydesdale Bank and Yorkshire Bank are also among those raising rates, blaming the weak economy and the increased cost of funding a mortgage.
Fears have been raised that people could struggle to switch to a better deal as lenders have already started tightening their borrowing criteria, triggering a fall in the proportion of mortgages being approved.