UK Mortgage SVR Interest Rate Increases Gather Pace

By: MoneyFacts

Since April 2009 the Bank of England has kept base rate on hold at 0.50%, but since that time eight mortgage providers have increased their standard variable rate (SVR).

Darren Cook, Spokesperson for Moneyfacts.co.uk commented:

“Many borrowers have reverted to rates as low as 2.50%, which means that remaining on a SVR is 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.

“By increasing the SVR, lenders are actively trying to encourage borrowers to find a new mortgage deal, but many are unlikely to act until a significant base rate increase is a real possibility.

“In recent months providers have been forced to increase savings rates in order to raise funding in a very competitive market. Increasing the SVR may be the only way some can offset this cost.

“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.”

www.moneyfacts.co.uk - The Money Search Engine

Moneyfacts.co.uk is the UK's leading independent provider of personal finance information. For the last 20 years, Moneyfacts' information has been the key driver behind many personal finance decisions, from the Treasury to the high street.

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.