While borrowers across the country may be disappointed by a delay in rates going down, those who have their mortgage with Standard Life have suffered a second blow in the form of a less than seasonal greeting from their lender.
“The company, which is not averse to the odd bit of negative publicity, has taken the bold step of increasing its SVR outside of a Bank Rate increase indeed, it has done it at a time where the universal opinion is that rates will be going down, explained Drew Wotherspoon of John Charcol.
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Standard Lifes SVR is still in line with the market, but that will not be an easy pill to swallow for its customers.
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Wotherspoon said: “What it does bring firmly into mind is the fact that, in most cases, borrowers should always pick a tracker over a discount if they can. With a discount you are solely at the behest of the lender, whereas a tracker is guaranteed to do whatever the Bank Rate does.
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So what product should I take?
Although nothing in life is certain, it looks likely that interest rates will be falling soon, and many commentators expect at least a half a per cent fall by the end of 2008, with some saying more.
This therefore makes trackers the clear product of choice at the moment, and there are some good ones available. Should you be after the lowest rate possible then John Charcols exclusive product at 0.66 per cent under Bank Rate is excellent value. With a current pay rate of 5.09 per cent, it will only take one cut in rates to send this below 5 per cent.
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Alternatively, a lifetime tracker may present the right option for many, and Nationwide currently has the crème of the crop with a rate pegged at 0.24 per cent above bank rate. Of course, borrowers may also like the idea of taking a product that allows them to keep their options open.
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Wotherspoon said: “John Charcol has an exclusive mortgage that has absolutely no fees, including no exit fee, and tracks just above the Bank Rate for two years. With no set up costs, and no exit costs, it allows you to benefit from a competitive rate while seeing what the market does during this fairly tumultuous period.
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