Following the recent increase in the base rate by the Bank of England, most borrowers who are on the lenders Standard Variable Rate will have noticed that their monthly mortgage payments have increased. However, not all lenders have added the increase onto their products.
Most of the main lenders have increased their SVRs in line with 0.25% rise in interest rates, including Nationwide, Barclays and Lloyds. Borrowers on a fixed rate product won’t have seen a difference in their monthly payments, as the interest rate on these is fixed for a specific period of time, usually two, five or ten years. Once the fixed rate deal ends, the borrower will revert to the lender’s SVR unless they apply for another fixed rate deal.
Many of the lenders increased their SVR in line with the Bank of England rise of 0.25%, although it is down to the lender’s discretion whether to increase their SVR rates or not. A tracker deal has to increase or fall in line with the Bank of England. Generally speaking, most of the SVRs are much higher than the fixed rate deals available, costing customers far more. Following the rise in Bank of England base rates, some lenders are still to apply the increase to their SVR, while others will apply the increase in the coming weeks. The only large lender that has decided not to pass on the 0.25% increase to customers is the Skipton Building Society, although the lender’s SVR was among the highest at 4.7%.
As lenders all have varying deals and interest rates, it is much simpler to ask a CeMAP qualified mortgage advisor for their assistance when searching for a new deal.
