Mortgage rates have risen since the budget based on expectations further base rate cuts could be delayed – and while this is bad news for borrowers, higher rates should be great for savers.
But the Money blog can reveal some of the same banks and building societies that have raised mortgage rates in the last three weeks have, counterintuitively, also reduced savings rates.
Savings Champion founder Anna Bowes said: “The latest inflation data should mean that the Bank of England will pause again before cutting interest rates – good news for savers but bad news for borrowers.
“However, some providers have made or are planning cuts to their savings rates anyway.”
These include HSBC, Lloyds, Nationwide, Halifax, Barclays and First Direct, she said.
We spoke to four different brokers who all confirmed these same high street names had raised mortgage rates in the past three weeks.
We have also been made aware of Santander both raising mortgage rates and reducing rates on savings.
Ranald Mitchell, from mortgage brokers Charwin Private Clients, told Money: “It’s a bit naughty!
“While banks and building societies are quick to hike mortgage rates, squeezing homeowners even further, their miserly cuts to savings rates reveal blatant profiteering at the expense of hardworking savers. It’s a shameless double standard that puts corporate greed ahead of customer interests.”
Justin Moy, managing director at EHF Mortgages, pointed out that savings rates are more likely to be linked to the base rate, which was cut last month – whereas 90% of mortgage deals are funded via swaps/gilts, which have been rising.
For him, the criticism begins when a lenders takes weeks to reflect the base rate cut in tracker mortgages.
He told Money: “We have noticed many lenders reduced their tracker mortgage deals four to six weeks after the announcement of a base rate change, grabbing that extra margin for a while longer, but are much quicker to react to savings rate changes,…
