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Major banks cut mortgage bills despite Bank of England hiking interest rates – see the full list of lenders

MAJOR banks have cut mortgage bills for some customers – despite the Bank of England hiking interest rates.

The central bank raised its base rate of interest yesterday by 0.75 percentage points to 3% – the biggest increase in 33 years.

Major banks have cut mortgage bills despite Bank of England hiking interest rates
Interest rate increases to 3%
Inflation to fall next year
Unemployment to hit 6.4%

It means that rates are now at their highest level since December 2008.

The bank warned that further rises might be required to bring down runaway inflation,

But there may be a glimmer of hope for homeowners, as some high street banks have announced a surprise cut to rates which will see some customers’ mortgage bills fall.

Over 2million households are on standard variable rates (known as SVRs) and they usually rise when interest rates are increased.

In an unprecedented move Barclays became the first bank to cut bills for mortgage customers on standard variable rates, known as SVRs.

The Bank of England used yesterday’s announcement as an opportunity to revise its predictions on how much interest rates will rise in future, and this may bring some relief on mortgage bills.

After the mini-Budget it had warned that they would hit 6% next year, which caused mortgage lenders to hike fixed bills.

However, yesterday it said that rates would hit a maximum of 4.6%.

This is because the higher base rate will soothe the financial markets and lead to a fall in swap rates – which is what mortgages are priced on.

This opens the way for lenders to reduce some rates.

Lenders price mortgages based on what financial markets predict interest rates will be in the next few years, rather than what the current interest rate is.

Fixed-rate mortgage holders are cushioned from the immediate impact of the base rate rise, but there are concerns that people will have to re-mortgage onto a much higher rate when they eventually come off their deal.

The remarks could be a glimmer of hope for the 1.8 million households whose fixed deals are scheduled to end next year.

Millions are facing rises – but they won’t be by as much as feared due to the revision in rates.

HSBC and Small lender MPowered Mortgages have announced a cut to some fixed rate deals.

Here we round up what banks have said so far following the Bank of England announcement – including the ones cutting rates.


Barclays became the first bank to cut bills for mortgage customers on SVRs.

The lender has reduced rates on its residential SVR by 0.25% from December 1.

A Barclays spokesperson said: â€œTo help customers with the rising cost of living, we are reducing the margin on the Barclays UK standard variable rate (SVR) for both residential and buy-to-let mortgage customers.

“This means customers on the SVR will be charged less interest on their mortgage than they otherwise would have been.”

The residential mortgage SVR will fall from 6.74% to 6.49%

However, it has not changed any of the rates on its fixed-rate products.


HSBC made some changes to its new and existing rates yesterday.

The bank has made reductions across the fixed rate mortgage range from 0.05% and up to 0.29%.

A HSBC spokesperson said: “As funding costs have reduced recently, we have been able to pass on reductions to our fixed rate mortgages.

“We are deeply committed to supporting First Time Buyers and their transition to get onto the property ladder.

Therefore we are pleased to be able to extend cashback deals on five year fee saver products from 85-95% LTV to 60-95% LTV.

“This will also be available for home movers.”


Santander said it will not to pass the full 0.75% base rate increase on to its Standard Variable Rate, instead increasing it by 0.01%.

Tracker mortgages and savings products directly linked to the base rate will be increased, alongside some other savings products not directly linked to the base rate.

Mortgage changes will take place from the beginning of December.


The interest rates charged on TSB‘s variable rate mortgages will increase by 0.75%.

But the bank haven’t changed any of the rates on fixed rate mortgages following the increase to the base rate yesterday.

TSB’s current Standard variable rate (SVR) is 4.25%, the Homeowner variable rate (HVR) is currently 5.74% and Buy-to-Let Variable Rate (BTLVR) is 6.59%.

MPowered Mortgages

Small lender MPowered Mortgages has also reduced some of its fixed deals by up to 0.76 percentage points.

For two-year fixed deals, it has reduced rates across all products by 0.3% to 0.5%.

Ten-year fixes have been reduces across all products too by 0.68% to 0.76%.


Nationwide told The Sun it us currently working through what this latest Bank Rate change means for borrowers and savers.

The society said it will announce any changes to rates in due course. 


Halifax said it will be reducing rates on its fixed-rate mortgages, but confirmed the change wasn’t related to the BoE hike.

The bank confirmed it would reduce several remortgage rates by up to 0.24% from next week.

A two-year fix will go to 5.78%, down from 6.02% with a £999 fee.

The bank also confirmed it’s re-introduced 40 fixed-fee deals, including a two-year fixed rate mortgage at 6.01% and a five-year fixed rate mortgage with a 5.66% interest rate.


Natwest said it is yet to make any changes following the Bank of England’s announcement yesterday.

A spokesman said: “We continually review our proposition to ensure it is in line with current market conditions and adapt our product range accordingly.”

We’ve also asked Lloyds, Virgin Money. Aldermore, and TSB if they are making a change to rates and will update when we hear back.

Tips for getting the best mortgage deal

Getting the best rate on your mortgage can depend on the rates available at the time, but there are several ways to land the best deal.

Usually the larger the deposit you have the lower the rate you can get.

If you’re remortgaging and your loan to value ratio has changed this could also give you access to better rates than before.

A change to your credit score or a better salary could also help you access better rates.

If you have a fixed rate, you could see higher rates when you come to the end of the current term after the BoE rise., either when shopping for a new fixed deal or reverting to the standard variable rate (SVR).

But if you’re nearing the end of a fixed deal soon it’s worth looking now. You can lock in current deals sometimes up to six months before your current deal ends.

Fixed rates have historically been cheaper than SVRs, but that may not be the case now, so its worth comparing the costs, and how long you want to be locked in for.

Leaving a fixed deal early will usually come with an early exit fee, so you want to avoid this extra cost.

But depending on the cost and how much you could save by switching versus sticking, it could be worth paying to leave the deal – but compare the costs first.

To find the best deal use a mortgage comparison tool to see what’s available.

You can also got to a mortgage broker who can compare for you, but you may have to pay for this service.

It could cost a couple of hundred pounds but it might save you thousands on you mortgage overall.

You’ll also need to factor in fees for the mortgage, though some have no fees at all, or you can add it on to the cost of the mortgage, but beware that means you’ll pay interest on it and so will cost more in the long term.

You can use a mortgage calculator to see how much you could borrow.

Remember, that you’ll have to pass the lender’s strict eligibility criteria too, which will include affordability checks, and looking at your credit file.

You may also need to provide documents such as utility bills, proof of benefits, your last three month’s payslips, passports and bank statement.

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