The gap between mortgage rates and savings rates is the worst since the financial crisis


Rachel Springall of data analysts Moneyfacts said it was “typical to see lenders pass on base rate hikes to follow-on mortgages” and hikes in standard variable rates following such news were also common. .

She said: “This week we saw an increase in trackers and return/tracking rates from Santander, TSB and Nationwide of 0.50pc.”

She added that some ranges of mortgages had been “pulled out entirely” as rates continued to rise.

Banks don’t feel pressured to pass the rise on to savers, according to Sarah Coles of investment service Hargreaves Lansdown, because so far savers have failed to ‘vote with their feet’ and seek the most competitive rate.

Many people hid their foreclosure savings in easy-to-access accounts during the pandemic with major high street lenders, in what Ms Coles called a ‘flight to familiarity’.

She said: “These banks are still sitting on those savings and they just don’t feel the need to offer savers anything better.”

This week, Bank of England Deputy Governor Dave Ramsden warned that another Bank Rate hike was on the horizon as soaring inflation takes hold in the UK economy .

Given that these rate hikes will affect savings rates, Ms Coles said savers considering switching accounts had no reason to delay: “The market will raise rates, but very slowly – so savers looking for the best deal should act now”.


Comments are closed.