Almost all of the biggest banks have hiked their mortgage costs, less than 24 hours after the Bank of England pushed up the base rate.
Santander became the first to announce the rise within 45 minutes of the Bank’s decision, telling customers that all tracker mortgages would increase by 0.15 percentage points from February.
The bank's standard variable rate will also increase to 3.5%. On a £200,000 mortgage, this would add roughly £72 to yearly repayments.
Santander's Rate for Life and Good for Life savings accounts which track the base rate will rise by 0.15 percentage points from January.
The Bank of England increased rates by 0.15 percentage points to 0.25% in an attempt to tackle surging inflation.
Millions of borrowers on standard variable and tracker-rate mortgages will likely see their bills rise as a result.
Barclays, Halifax, Lloyds Bank, NatWest and Nationwide all said they would pass on the full increase to customers with mortgages linked to the base rate.
Smaller lenders TSB and Virgin Money also followed suit.
Around a quarter of all homeowners in the UK are on a variable or tracker mortgage.
These are the most vulnerable products when rates rise – as banks can change their charges almost instantly.
On average, the 850,000 borrowers on tracker-rate mortgages will see a £186 increase in their yearly repayments, according to UK Finance, the lender body, equivalent to £15.50 a month.
For the 1.1million customers on standard variable rate mortgages, costs will jump by an average of £9.58 a month, or £115 a year.
Virgin Money said it would increase its tracker mortgage rates by 0.15 percentage points in February. It is now reviewing its standard variable rate - which is currently 4.34%.
TSB’s standard variable rate will rise to 3.74% “early next year”, the bank said. Barclays said its standard variable rate would rise to 4.74% and its trackers would increase in January.
NatWest, Lloyds and Halifax also announced they would increase the cost of bank rate-linked mortgages in February. Each bank said savings rates were “under review.”
The three lenders’ standard variable rates are 3.59%, which could rise to 3.74% if the full rise is passed on.
Nationwide, Britain’s biggest building society, also said tracker mortgages would rise from February but said it was "considering what impact this announcement would mean for savers”.
Its standard variable rate could also rise to either 3.74% or 2.25% if the bank rate rise is passed on.
Anna Bowes, of Savings Champion, a savings advice website, accused banks of increasing their charges for borrowers but failing to pass on the benefit of higher rates to savers.
In August 2018, the last time the Bank increased the bank rate, just 32% of existing variable-rate savings accounts saw an increase.
"It is definitely an opportunity for banks to increase their margins, and savers are the ones who lose out," said Ms Bowes.
