Mortgage Rates Rise: Clydesdale and Yorkshire Banks Push Up Prices

Two MORE Banks Announce Mortgage Rates Rise

Clydesdale and Yorkshire Banks have become the latest lenders to announce mortgage rate rises, affecting 30,000 customers.

The banks' standard variable rates (SVRs) will rise from 4.59% to 4.95% from May 1, meaning repayments will typically go up by less than £30 a month.

The rises mean someone on a £100,000 capital repayment 25-year mortgage will pay £581.68 a month, a monthly increase of £20.73 or nearly £250 a year.

This is the first change to the banks' SVR in more than three years and reflects the increased cost of funding mortgages, the pair said.

Lenders have made a wave of mortgage rise announcements over the last week, affecting more than a million borrowers in total, blaming higher funding costs and the weak economy.

RBS-NatWest confirmed on Saturday that it is pushing up rates on two of its products - the Offset and The One Account - by 0.25%, taking them to a rate of 4%, affecting around 200,000 customers.

On Sunday, Halifax announced that some 850,000 borrowers will see their mortgage costs increase as the SVR rate rises from 3.5% to 3.99% from May 1.

The Bank of Ireland also announced this week that it is increasing its SVR rates, affecting 100,000 UK customers. It will raise the SVR on its mortgages to 4.49% from 2.99% in two stages.

SVR customers tend to have already made some progress in paying down their mortgages as borrowers revert to paying SVR rates when fixed deals come to an end.

A statement from Clydesdale and Yorkshire Banks, which are part of National Australia Bank, said exit administration fees will be waived until July 31 if customers want to switch their provider.

Steve Reid, the banks' retail director, said: "While our SVR will continue to remain competitively below a number of other UK mortgage providers, the market and costs associated with providing mortgages have changed significantly in the three years since the rate last moved."

He continued: "This change will help enable us to continue to support savers and maintain the competitiveness of our deposit rates.

"Our commitment to the mortgage market, including strong support for first-time buyers as one of only a handful of lenders who have consistently offered 95% LTV mortgages, remains as strong as ever."

The hikes come despite the Bank of England maintaining the base rate at a historic 0.5% low and have previously been branded "shocking" by the Consumer Action Group.

Analysts have warned that lenders are expected to tighten up on borrowing this year amid the weak economic conditions.

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