However, interest rates are still considered low by historic standards. It is important to remember that this is the fifth consecutive BoE rise in a row - so the actual price hike will be hundreds of pounds more compared to rates of 0.1% last year. "A mortgage broker would be able to recommend the best mortgage for you as it’s not necessarily going to be the one with the cheapest headline rate of interest." While some homeowners will be able to afford that, others will undoubtedly struggle, especially as other costs spiral.
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Sarah Pennells, consumer finance specialist at Royal London, explained how someone with a £200,000 25-year repayment mortgage will pay an extra £27 a month as a result of the rates hike. Lloyds Banking Group - which owns Lloyds Bank, Halifax, Bank of Scotland - says it is still reviewing its rates. No changes for its SVR mortgages have been confirmed at this time. HSBC and First Direct customers will see their tracker mortgages rise from June 17. But it didn't confirm when changes to SVR products will be made. Nationwide says tracker mortgages will go up by the same amount from August 1. Barclays has confirmed that customers with an SVR mortgage, will see their rate go up 0.25 percentage points from August. TSB says the changes for variable rate mortgages for existing customers will take effect on July 9, again by 0.25 percentage points.
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This includes the Santander follow-on rate (FoR) which will increase to 4.50%. From August 1, Santander said its SVR will rise by 0.25 percentage points but its tracker mortgage products will go up by the same amount from July 1. If you were on a fix or tracker rate which has ended, it is likely you will now be on a SVR type of mortgage deal, Mirror reports.
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But lenders are more likely to pass on the full interest rate to someone on a SVR mortgage. Those on a tracker rate mortgage will see their interest rates go up automatically in line with the BoE rate hike. The rate your repayments will increase depends on what type of mortgage you have taken out. It is thought that this will affected around two million homeowners. The Bank of England (BoE) says it will increase its base rate from 1% to 1.25%. Banks across the country have started to confirm when customers on standard variable rate (SVR) mortgages will see interest rates will go up.