Banks hike mortgage interest rates

Banks have been hitting mortgage borrowers with interest-rate rises recently, even though the Bank of England base rate has remained at 0.5% since March 2009. Ruth Jackson finds the best deal on offer, and rounds up the rest of the week's personal finance news.

Royal Bank of Scotland and Lloyds hit mortgage borrowers with an interest-rate rise last week, even though the Bank of England bank rate has remained at 0.5% since March 2009. The rates on some of the lenders' most competitive mortgages have risen by 0.3 percentage points each, adding £600 a year to repayments on a £200,000 mortgage. NatWest, part of RBS, hiked the rate on its five-year fixed-rate deal from 4.19% to 4.49%. The best five-year fix available is First Direct's with a rate of 3.89% and a £99 fee.

* Thousands of credit and debit card users were double-charged on New Year's Eve due to a fault with a Lloyds payment service. The bank estimates that 200,000 people with cards provided by various banks will find two identical charges on their statements. Duplicated transactions have been reversed and cardholders will be reimbursed, but if you think you have been penalised as a result of the error you can contact Lloyds, which has set up a dedicated helpline on 01268-567100.

* Personal loan rates have hit their lowest levels for two years. The average rate on an unsecured loan of £7,500 has fallen to 7.89%. Eight lenders have cut their rates on loans of between £7,500 and £15,000 since December. But anyone wanting to borrow less than £5,000 won't benefit - loans for smaller amounts have actually been rising. The typical rate for a £3,000 loan has risen by 2.19 percentage points to 15.12% over the same period.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

* An estimated nine million taxpayers are due to file their 2009/2010 tax return online by 31 January. If you are one of them, here are the things you need to remember: your P60, which summarises your earnings and your PAYE contributions; your P11D, which summarises any employee benefits you receive; invoices or accounts; receipts for work expenses; tax deduction certificates from banks and building societies; details of pension contributions to personal pensions; dividend vouchers; details of interest income from any loans you have made; income from any rental properties; mortgage interest paid on rental properties; details of expenses for rental properties; and details of any capital gains. Once you've got all that and filled out your self-assessment form, you need to file it by 31 January to avoid a £100 fine.

* Energy firm E.ON has announced that it will increase its prices from 4 February. Prices will rise by around 9% for electricity and 3% for gas, adding £58.40 to the average annual bill for customers who get both fuels from E.ON. They are the fifth of the big six energy firms to raise prices this winter. The good news is that 5.3 million of E.ON's customers will be unaffected for now, as they are either on capped or fixed-rate deals, or they are part of the firm's WarmAssist deal for vulnerable customers; or they are Age UK customers - for whom the rise is delayed until April. EDF is the only energy giant yet to lift its prices this winter. The company has guaranteed its prices won't rise until March, but expect a lift then.

Ruth Jackson-Kirby

Ruth Jackson-Kirby is a freelance personal finance journalist with 17 years’ experience, writing about everything from savings accounts and credit cards to pensions, property and pet insurance.

Ruth started her career at MoneyWeek after graduating with an MA from the University of St Andrews, and she continues to contribute regular articles to our personal finance section. After leaving MoneyWeek she went on to become deputy editor of Moneywise before becoming a freelance journalist.

Ruth writes regularly for national publications including The Sunday Times, The Times, The Mail on Sunday and Good Housekeeping, among many other titles both online and offline.