Borrowers on standard variable rate (SVR) mortgages should prepare for price hikes in May, finance experts have warned.
Borrowers on standard variable rate (SVR) mortgages should prepare for price hikes in May, finance experts have warned.
Moneyfacts, the independent data provider, is urging SVR customers or those coming to the end of their deal to look for a fixed-rate mortgage, which will provide shelter from future increases.
The cost of mortgages has remained stable in the three months following the Bank of England’s interest rate rise, Moneyfacts’ figures have shown.
But with predictions of another rate increase in May Moneyfacts is warning the calm may not last for long and SVR customers should not rest on their laurels.
Indeed, during this period of stability SVR customers have experienced the biggest price hikes with average rates rising from 4.60% to 4.76%.
Charlotte Nelson, finance expert at Moneyfacts, said: “The talk of another base rate rise as early as May could mean that these borrowers find themselves significantly worse off.
“A further 0.25% rise means that borrowers might see a £35 increase to monthly repayments (based on the average SVR) in a short six months.”
She added: “The mortgage market is seeing a double-whammy: higher SWAPs and increased Libor rate indicates that a base rate rise in the near future is likely.”
Her advice to borrowers sitting on their SVR or approaching the end of their deal was to look at switching to a fixed-rate mortgage.
She added: “It is now important that they act fast to ensure they get the best possible deal.”
