Royal Bank raises home loan rate

13 April 2012

THE Royal Bank of Scotland is the latest lender to announce it was passing on the recent rise in interest rates to its homebuyers.

The group is increasing its standard variable mortgage rate by the full 0.25% to 6.54% from 1 July. It added that it was also raising its savings rates by up to a quarter of a percentage point.

HSBC said on Friday it was increasing its homebuyer rate by 0.25% to 5.49%, while Northern Rock became the first major lender to increase its rate by more than 0.25%, raising it by 0.3% to 6.59%.

Most of the big lenders have said they will be passing on the hike. Abbey National and First Direct said they were increasing their rates on the day the Bank of England's monetary policy committee announced it was raising rates to 4.5%.

Nationwide, Cheltenham & Gloucester, part of Lloyds TSB, Halifax, and Barclays and The Woolwich have all also announced increases.

NatWest and Alliance & Leicester are still reviewing their rates.

A 0.25% increase will cost someone with an average £65,000 repayment mortgage around £10 a month, increasing monthly repayments to £438.88 based on a new rate of 6.5%.

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