Leading mortgage lenders last night opted not to react immediately to the increase in the Bank of England base rate, largely keeping their own rates on hold. However, while no major lender raised its standard variable lending rate, almost all are expected to do so within the next few days.
Halifax said it was considering its position after the base-rate increase, while its rivals took a similar stance. Tracker mortgages, where what borrowers pay automatically moves up and down in line with base rates, were the only area of the home-loan market affected immediately. Nevertheless, mortgage advisers expect lenders to pass on the rate rise in full.
A 0.25 percentage-point rise in the cost of home loans would cost the average homeowner with a £110,000 repayment mortgage an additional £23 a month.
Consumer groups warned the move would add to Britain's debt crisis. Peter Tutton, at Citizens Advice, said: "We are seeing a rapidly growing number of people falling behind with mortgage payments,and in some cases threatened with repossession."
Savers, however, welcomed the base-rate increase. Several savings account providers passed on the rise to some customers with immediate effect.
Savings experts said the rise could intensify a growing price war. Susan Hannums, at the financial adviser AWD Chase de Vere, said: "All eyes will be on ING Direct, which refused to hand over the last increase and disappointed thousands of savers."Reuse content