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

“Borrowers coming off their fixed rate deal will be disappointed to see this latest rise to the Bank of England base rate, particularly if they plan to sit on their standard variable revert rate over the shorter-term in hopes that fixed rates will come down before they refinance. The mortgage market is slowly recovering from the volatility of interest rate uncertainty towards the tail end of 2022, but the markets are expecting both rises and falls to base rate this year. Lenders tend to pass base rate rises onto SVRs within a few months and a rise of 0.50% on the current average SVR of 6.84% would add approximately £1,536* onto total repayments over two years.

“The cost of living crisis presents a challenging situation for borrowers with an existing mortgage and those who are looking to get onto the property ladder. First-time buyers with a limited deposit may put their plans on hold until they can more comfortably afford to take out a mortgage. New buyers play a crucial role in keeping the market moving, but it would be understandable to see caution when affordable housing is in such short supply. Borrowers with an existing deal may struggle to make overpayments and be concerned about future affordability due to unpredictable house prices and interest rates. Seeking advice before entering any arrangement is wise, as the best deal for any borrower will depend on their individual circumstances.”

*Average standard variable rate (SVR) is currently 6.84%. 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:

“Interest rates on variable savings accounts are continuing to rise, as several providers have improved their offers since the start of 2023. The influence of the Bank of England base rate rises, along with rate competition, has made a positive impact on variable rate savings accounts, which include Cash ISAs. Challenger banks and building societies continue to take the most prominent positions in the top rate tables, so savers who fail to review their existing account to the latest top rates may miss out. Loyalty does not always pay and the majority of the biggest high street banks** have failed to pass every Bank of England base rate rise to easy access accounts, with two brands passing on just 0.54% since December 2021.

“As the new tax-year in April draws near, savers may already be comparing ISAs and be pleasantly surprised to see rates are much higher than this time a year ago. Those savers who hope rates will rise further during ISA season may wish to stick to a flexible pot in the meantime so they can quickly take advantage of rate competition. Savers must also consider their Personal Savings Allowance when comparing ISA and non-ISA accounts, as there are usually differences in the top returns on offer, but ISAs will remain valuable for their longer-term tax-free benefits. Whichever account savers choose, it is imperative they keep on top of the changing market and compare rates and criteria carefully before they invest.”

**Brands considered as the biggest high street banks include Barclays Bank, HSBC, Halifax, Lloyds Bank and Santander. Barclays Bank (Everyday Saver - pays 0.55% at £10k gross, up from 0.01%), Halifax (Everyday Saver - pays 0.70% at £10k gross, up from 0.01%), HSBC (Online Bonus Saver - pays 2.97% at £10k gross when no withdrawals made, up from 0.05% and Flexible Saver - pays 0.90%, up from 0.01% at £10k gross), Lloyds Bank (Easy Saver - pays 0.60% at £10k gross, up from 0.01%), Santander (Everyday Saver - pays 0.55% at £10k gross, up from 0.01%).