Mortgage News Mortgage Lenders Increase Standard Variable Rates 18470311
Mortgage lenders increase standard variable rates
08 January 2010 / by Andy Davies
Mortgage lenders have increased their standard variable rate (SVR) despite the Bank of England continuing to hold the base rate at 0.50 per cent, Moneyfacts.co.uk has revealed.
Since April 2009, eight mortgage providers have increased their SVR by as much as 1.49 per cent.
For instance, Nationwide launched a new SVR of 3.99 per cent on new mortgage deals on April 30 last year, while all deals taken out on or before April 29 remained at the previous rate of 2.50 per cent.
Meanwhile, Skipton Building Society applied a new SVR to all new mortgages taken out on August 3 2009, with the new rate standing at 4.50 per cent, compared to the previous rate of 3.50 per cent.
According to the Moneyfacts.co.uk, Chesham Building Society’s SVR of 6.45 per cent is the highest currently available, while a number of lenders including Cheltenham & Gloucester continue to offer the lowest SVR of 2.50 per cent.
Commenting, Darren Cook, spokesperson for Moneyfacts.co.uk, stated that while some rates continue to hold at 2.50 per cent, remaining on a SVR instead of switching to a fixed rate will be an “attractive option for many”.
“The latest remortgage approvals figures continue to show record lows as borrowers continue to stay on a revert-to rate rather than move on to a new deal.
“There is little or no incentive for borrowers, particularly those with little or no equity, to find a new deal when in all likelihood they will have to pay a higher rate,” he said.
Mr Cook explained that by increasing the SVR, lenders are actively trying to encourage borrowers to seek out a new mortgage deal, but said many borrowers are unlikely to act until a “significant base rate increase is a real possibility”.
However, he warned: “The momentum to increase SVRs appears to be gathering pace and now that a few have taken the step, it is highly possible others will follow.”
© Fair Investment Company Ltd