Lenders adjust variable rates following BoE decision

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Lenders adjusted variable rates and issued notices to borrowers after the Bank of England raised the base rate to 0.75%.

The 0.25 percent hike was made at the March 16 Monetary Policy Committee meeting and was the third increase since December. It also brought the base rate back to where it was between August 2018 and March 2020.

In response, Nationwide’s tracker mortgage rates will be impacted from May 1. This will not apply to trackers reserved between December 1, 2004 and February 16, 2009 because the tracker floor is higher than the base rate.

Mutual said it was “working” on what this might mean for its Standard Mortgage Rate (SMR) and Base Mortgage Rate (BMR), but assured it would provide an update in due course.

Santander said rates on its tracker mortgages will automatically increase to reflect the new rate and will apply from early April. Its follow rate will drop from 3.75% to 4%.

All tracking rates and reversion rates on its new business and internal transfer products will increase in line with the base rate on Wednesday, March 23.

Alliance and Leicester’s tracker mortgages will also be increased in early May, while its standard variable rate (SVR) has risen from 4.74% to 4.99%.

Skipton Building Society has confirmed that existing borrowers on tracker mortgages will also see a rate increase and this will happen within two weeks.

Its current base tracking products will be retired on March 21 and replaced the next day.

This will not be reflected in the Mutual’s SVR or Mortgage Variable Rate (MVR).

Ian Cornelius, Commercial Director of Skipton, said: “With households facing the highest rate of inflation for many years and customers facing soaring energy bills, it is our duty to help our customers in these difficult times.

“That’s why we’ve made the decision to keep our MVR/SVR rates at current levels – we believe it’s the right thing to do for our borrowers.”

Halifax said it will write to affected borrowers to let them know of any changes to their interest rates.

The Co-operative Bank said it would review its tracking mortgage rates and SVR and communicate any updates to borrowers.

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