The SVR alarm clock gives homeowners a remortgage wake-up call
Homeowners are being encouraged to check their current mortgage rates as more lenders increase their standard variable rates (SVR).
According to consumer watchdog Which? homeowners are set to pay an additional £300m a year due to lenders increase of SVRs.
Four lenders last week increased their SVRs; Halifax (3.5% to 3.99%), Co-operative Bank (4.24% to 4.74%) and Yorkshire and Clydesdale banks (4.59% to 4.95%). Halifax customers with a £150,000 mortgage will now pay an extra £480 a year in repayments while those with a £200,000 mortgage will face a hike of £660.
With many homeowners already concerned over the rising cost of living, now could be a good time to remortgage.
Further investigation by Which? revealed a staggering 75 per cent of mortgage-holders said they would be affected if their repayments rose by even £50 a month.
While homeowners with little or no equity may find remortgaging difficult, and borrowers utilising the 2.5 per cent on SVRs with Nationwide and Lloyds are unlikely to find a new cheaper rate, remortgaging is certainly an avenue worth exploring especially with a growing fear within the industry of other lenders following suit.
Peter Vicary-Smith is the Chief Executive of Which?:
“These SVR rises are the consequences of the lack of competition in the market and the failure of the government to take action to promote competition.
“This is why the new financial regulator, the Financial Conduct Authority, needs to be a watchdog not a lapdog. It must stand up for consumers and stand up to the banks.”
Content correct at time of publication