What’s changed since the increased interest rate two weeks ago?

According to analysts at Moneyfacts, 57% of savings providers and mortgage lenders are still to announce any changes to their rates since the decision was taken to raise the bank base rate by a quarter point two weeks ago.

Overall, 57 providers have increased their standard variable rate. Two of these have gone above the quarter per cent rise and four have gone for a lower increase of 0.20% or 0.24%. Among those who have so far increased their rates, 44 providers are already applying the higher rates to new borrowers.

Firstly let’s turn our attention to mortgages. Abbey has announced this week it will increase its SVR by 0.34% to 7.0%. At first this would appear to be an alarming rise, however upon closer inspection, none of Abbey’s products are currently linked to SVR so very few customers will actually be affected- just those who have remained on a SVR after their previous deal has come to an end.

If customers find themselves in this scenario, then they should look around for a better deal. With a little research they will find a more suitable deal to suit their pocket.

Similar to the last rise, bigger named providers like HSBC , Woolwich and NatWest are still to make statements on their preferred course of action. We find Building Societies tend to be slower to announce their positions as many require board approval in order to apply increases. Building Societies make up a third of the number still to announce their plans, so an accurate overview of the full affect could still take some weeks to become apparent.

Turning our attention to savings now, 54 institutions have thus far increased their rates, but only 42 of them have applied the rise across their entire savings range.

Two providers so far have opted for a 0.20% rise. Homesdale BS has not passed on the full quarter rise to its new savers on either of the last two increases. It has however, increased its SVR by 0.25% thus leaving it well below the industry standard.

Cahoot also raised their rates by only 0.20%. Points to note are that firstly the Cahoot account does have a rate guarantee, but it was set at a level to allow a smaller increase. It is worth remembering to read the small print since having a rate guarantee from your provider doesn’t necessarily mean you are automatically entitled to any rate increases.

Secondly, even though providers may not pass on the whole increase, you need to look across the board. As with Homesdale BS, Cahoot makes it up to the customer in other ways and still secure themselves a good place in what is a very competitive savings market.