Coventry increases mortgage and savings rates

Coventry increases mortgage and savings rates

Coventry Building Society is set to increase its mortgage and savings rates following the Bank of England base rate rise last week.

Since the monetary committee unanimously voted to raise the base rate by 0.25 of a percentage point to 0.75 last week, a number of banks and building societies have adjusted their mortgage rates to reflect the change.

Coventry Building Society is the latest lender to match the Bank’s full rise, increasing all variable mortgage rates by 0.25 per cent with effect from 1 September.

From this date, Coventry’s standard variable rate will be 4.99 per cent and its privilege rate 4.74 per cent.

A Coventry spokesperson said all affected borrowers will be contacted no later than 23 August.

Peter Gettins, product manager at London & Country Mortgages, said that while clearly nobody will welcome an increase to their payments, at least Coventry has reacted fairly promptly and are not increasing by more than the 0.25 per cent Bank of England rise.

He said: "This should act as a prompt for borrowers to review their deal – Coventry have a good policy of offering the same rates to new and existing customers, and lenders are hungry for business so there are some excellent products available in the wider market."

Coventry Building Society will also increase savings rates for both new and existing savers following the rate rise.

Some of the society’s variable rate savings accounts will increase by up to 0.25 per cent AER effective from 1 September, while instant access accounts and fixed rate accounts will remain the same.

A Coventry spokesperson said: "We consistently pay more on savings than the market - nearly twice the market average in the first part of 2018 - and the increases we are making mean that 97 per cent of savings held with us will earn 1 per cent or more, regardless of the balances held in savers’ accounts."

The spokesperson said the society is also increasing rates on closed accounts as well as new accounts, in an effort to reward loyal members while encouraging new members to join.

Tom Adams, head of research at independent savings advice site Savings Champion, said while the wait continues for the majority of savings providers to announce their planned reaction to last week’s base rate rise, it was good to see one of the larger and more prominent names in the savings market make its intentions clear.

He said: "Judging by the announcements so far, and the results we saw after the last base rate rise in November 2017, Coventry Building Society will not be alone in not raising the rate on every account by the full amount.