Mortgage rate increase: Abbey follows Halifax and Nationwide on 100 Mortgages

Abbey will increase its Tracker rates tomorrow by 0.5 percent, ahead of the expected rate cut from the Bank of England’s Monetary Policy Committee on Thursday. The Spanish owned bank blames competitors repricing for its rate increase. However some would say they are pushing their rates up before the Bank of England reduces its rate to soften the blow to Abbey’s Tracker mortgage rates.

It’s widely expected that the Bank of England will reduce the base interest rate down to 3.5 percent which would be a 1 percent interest rate cut.

Banks such as HSBC have already stated that they will not pass such a large cut to borrowers. Abbey’s increase of its tracker rates has been criticized as a similar pre-emptive move. However Abbey did reduce the rates on its fixed-rate deals by up to 0.35 percent last week.

Abbey is not alone in mortgage rate increases, Northern Rock and Nationwide have increased their rates, and Halifax have increased the rate on its 5 year tracker by 0.5 percent and withdrawn both its 2 and 3 year tracker products.

Source: mortgagestratergy

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