Rachel Springall, Finance Expert at Moneyfacts.co.uk, said:

“Mortgage rate competition has been rife this year, so while there has been a rise to bank base rate, this would typically be passed on to revert rates and base rate tracker deals. Fixed mortgage rates have risen slightly since last month, but lenders are still fighting for new business and borrowers could stand to make a substantial saving by moving off a variable revert rate to a fixed rate.

“Borrowers sitting on their standard variable rate (SVR) may see their rate rise within a month or perhaps within the next three months, depending on their lender. The difference between the average two-year fixed mortgage rate and SVR stands at 2.06%, and the cost savings to switch from 4.40% to 2.34% is a difference of £5,250 over two years* approximately. A rise of 0.15% on the current SVR of 4.40% would add £408* approximately onto monthly repayments over two years.

*Average standard variable rate (SVR) is currently 4.40%. Calculations based on a £200,000 mortgage over a 25-year term on a repayment basis.

Rachel Springall, Finance Expert at Moneyfacts.co.uk, said:

“Savers with their cash in a flexible account may have noticed it’s been a very volatile year of interest rate changes outside of any base rate change. Interest rates fell to record lows on average this year, but thankfully the market has been showing green shoots of recovery. This base rate change may take a few months to trickle down to savers who have a variable rate deal, but there is also no guarantee the rate will be passed onto them in full, or at all. Should savers see 0.15% passed onto them, it would mean receiving £30 more a year in interest based on a £20,000 investment.

“It remains the case that savers need to act swiftly to take advantage of the best deals and, as some easy access accounts pay as little as 0.01%, hopefully this base rate rise will shake any saver’s apathy to look elsewhere. The biggest high street banks are unlikely to be matching base rate on their easy access accounts, so savers would be wise to reconsider their loyalty.”