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Last Updated: Friday, 6 February, 2004, 14:31 GMT
Lenders rush to raise their rates
A house
Mortgage payments are going up
Millions of homeowners are facing higher mortgage payments following the Bank of England's move to raise interest rates to 4%.

The Halifax, Nationwide building society, Abbey, and Barclays all raised their standard variable mortgage rate by a quarter percentage point.

Other mortgage lenders are expected to follow suit and raise rates soon.

However, most banks and building societies have as yet failed to pass on higher rates to their savers.

Savers wait

In fact, only a handful of savings accounts providers have signalled that they intend to raise rates.

I may have to take a temporary job just to make ends meet
Daniel Yates

The Nationwide promised that it will raise rates on 1 March, the same day its mortgage increase comes into effect.

However, the building society has not said by how much it will increase its savings rates.

Savers with accounts guaranteed to track the Bank of England base rate will benefit almost immediately.

Egg, the internet bank, told BBC News Online that its savings rates would rise by a quarter percentage point in about two weeks time.

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