Nationwide has already confirmed its variable rates will go up by 0.25% on December 1 after the Bank of England confirmed a rate hike of the same amount today.
HSBC has also announced it will increase tracker mortgage rates linked to the base rate by 0.25% from tomorrow, following the much-anticipated rate hike to 0.5% from the central bank.
And a flood of lenders are rushing to following suit.
TSB has confirmed variable rate mortgages will increased by 0.25% next month.
Yorkshire Building Society has also announced its Standard Variable Rate (SVR) will increase by 0.25% to 4.99% in December – although the society’s intermediary-only arm Accord will reduce its rate by 0.35% to bring it in line with Yorkshire.
Estimated profits at the 24 biggest banks and building societies will rise by 3.1% over the next year as the rate rise is passed on, according to analysis by consultancy Simon-Kucher.
Kathleen Brooks, research director at City Index, said: “If you have a variable rate mortgage, like a lot of people do, then the increase in rates will be felt almost immediately.
“However, it’s a small increase so people will be watching to make sure banks aren’t too greedy and push up rates too far, especially if the BOE hints that this hike will be an isolated move.”
Banks are expected to raise fixed-rate deals more gradually.
However, lenders have already been shifting up deals ahead of the move by the Bank of England.
Daniel Bailey from mortgage broker Middleton Finance said: “We have already seen a number of lenders raise their fixed rates in the anticipation of a rate rise.
“I would expect to see other lenders follow suit and increase their fixed rates.”