Millions of homeowners face mortgage misery after interest rates jumped for the fifth month in a row to a 13-year high of 1.25 per cent, which is this is the fastest that rates have risen over a six-month period since 1988.
Borrowers with variable-rate deals will see their bills soar by hundreds of pounds a year almost immediately.
Barclays, First Direct, HSBC and Virgin Money were among the first to reveal their variable – or tracker – rates would rise straight away. Santander is raising its rates from July and Nationwide from August.
The rise by HSBC yesterday was 0.5 per cent – double the increase by some of its rival lenders on the same day, and also twice the size of the Bank of England’s 0.25 per cent interest rate increase.
Around two million homeowners have a variable-rate mortgage that moves up or down in line with the Bank’s base rate.
Someone with a £150,000 loan on their lender’s average standard variable rate will have to pay an extra £21 a month – or £252 a year, according to mortgage broker L&C.