Mortgage pinch

Borrowers are already seeing their monthly mortgage repayments rise just days after early May's Bank of England base rate increase from 5.25 % to 5.5 %. Therefore those on Standard Variable Rates from banks such as Mortgage Express, Barclays and Abbey Mortgages may soon see the increase hitting their pocket.

Worst still is that some lenders have used the time to increase their interest by more than 0.25 %. E.g. Intelligent Finance (IF) has upped its offset SVR by 0.35% to 7%. Standard Life Bank has upped its SVR by 0.3% to 7.06 %, and First Active and some Bradford & Bingley SVRs have already risen by 0.25 %. Bristol & West, Halifax, Lloyds TSB (which includes Cheltenham & Gloucester), Nationwide and Northern Rock will follow in June.

Broker Chase de Vere Mortgage Management says someone on Lloyds TSB's SVR, which will rise from 7.25 % to 7.5 %, will see monthly repayments rise by £16 on a £100,000 repayment mortgage.