Approximately 850,000 customers have some or all of their mortgage balance on the Halifax Standard Variable Rate, with an average balance of £67,500.
The lender has called in extra call-centre staff today to deal with the increased phone calls.
The average customer will see monthly payments rise by £16.40 and Halifax will be writing to customers to explain a change to its standard variable rate from 1 May 2012.
This follows Halifax’s move to raise its SVR cap on 28 February from 3% to 3.75%, which affected roughly 40,000 customers, which will take place on 31 March.
Halifax said the move reflects funding costs as the cost of supporting competitive savings rates and raising money in the unsecured and securitization markets has also risen sharply.
The bank said the average savings rate was 1.27% higher than the Bank of England base rate alongside the fact the cost of a four year securitisation bond has risen 1.34% in five years.
Comparatively, the move keeps Halifax near the middle of the pack on SVR but many lenders will be dealing with the same rising costs.
According to Moneyfacts, Cheshire Building Society at 2.50% and Stafford Railway Building Society and Bank of Ireland currently offer the lowest UK SVRs, with KRBS offering the highest at 6.08%, followed by MBS Lending at 6% and ITL, Accord and Shepshed on 5.99%.
A Lloyds spokesperson said: “Some broker’s clients may be on SVR so this is a good opportunity to contact clients and we will be pointing customers back to their broker when they apply to us. Brokers will also be paid a product transfer fee on every product transfer.”
Ben Thompson, MD of Legal & General Mortgage Club, said: “Whilst base rate is unlikely to change this or even next year it is worth periodically checking in with an intermediary to see if a current deal can be bettered. Low rates will not last forever.”
Analysts are predicting a wave of increases in mortgage interest rates after the announcement from Halifax.
Justin Modray, of Candid Money, said the move would probably lead to SVR increases by other lenders: “If one bank can get away with it, others will follow suit quite quickly,” he said.
