Santander is the latest lender to announce a rise in its standard variable rate (SVR), moving up by 0.5 per cent to 4.74 per cent from 3 October 2012.
A number of lenders have increased their SVRs recently. On 1 May 2012 Halifax’s SVR went up by 0.5 per cent to 3.99 per cent, the Co-operative Bank also went up by 0.5 per cent to 4.74 per cent and Yorkshire and Clydesdale Banks’ SVR moved from 4.59 per cent to 4.95 per cent.
If your mortgage rate goes up and you find yourself struggling you should speak to your lender to find out what your options are.
Ben Thompson, MD Legal and General Mortgage Club commented: “Many are perplexed that SVRs can rise without any change to Bank Base Rate, which remains stuck at 0.5 per cent, and has been for over three years. However it is the wider cost of funding that has forced change.
“Although nobody wants their mortgage rates to rise, today’s rates have to be seen in the context of historical levels, and they are very low indeed by comparison. It is almost certain that we have now seen the cheapest mortgage rates in a lifetime, although SVRs bottomed some time ago.
“For many lenders mortgage terms and conditions will allow a lender to move its SVR if it wants to. For example, many of those that have increased have cited “exceptional market circumstances” as a means by which to justify a rise in rate. However, some lenders do not have the same flexibility as competitors and due to the wording of agreements find their hands are tied otherwise they would no doubt follow suit.
“That said, although there may be a few more moves in the pipeline, we don’t expect a landslide of SVR changes to follow. Our advice would be to talk with your existing lender to explore any new options that you might have, but certainly do talk to an independent intermediary who will provide you with a wider market perspective and all round choice.”
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