UK: Mortgage fears as banks consider raising interest rates
HOMEOWNERS who also run a car are set to suffer a double-whammy in their pocket.
Fuel prices are already at record highs – now mortgage rates are set to rise as well.
RBS-Natwest is pushing up rates on two of its products by 0.25%, while Halifax is expected to raise its standard variable rate tomorrow.
The hikes in cost come despite the Bank of England maintaining the base rate at a historic 0.5% low and are expected to raise concerns among thousands of homeowners who are already struggling to make ends meet.
An RBS spokesman today said its rises would apply to two of its products – the Offset and The One Account, and would affect around 200,000 customers.
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He said: “Over the last year the cost of funds at which we need to borrow at to fund our mortgage commitments has risen considerably.
“We have absorbed the cost during this period but have now decided to pass on some of this increase, 0.25% to our Offset and The One Account customers.
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“For the majority of our Offset and One Account customers their new rate will be 4%, the same as our standard variable rate.”
The move comes amid speculation that Halifax is set to push its standard variable rate (SVR) up from 3.5% to 3.99% from May 1, thought to affect around 850,000 customers.
The hikes are apparently due to higher costs of funding a mortgage in the current economic climate.
They come as families are being squeezed harder than ever by rising costs of living.
Among these are record high prices for petrol, announced yesterday – with the average cost of a litre at 137.44p, according to the AA, while diesel is up to 144.67p a litre, another new record.