Despite the Bank of England’s Monetary Policy Committee (MPC) leaving the standard base interest rate at the historically low level of 0.5% some homeowners have been facing rising mortgage costs.  Homeowners that have had their mortgage deal end and have not remortgaged have been moved to their lender’s standard variable rate (SVR) to face rising costs in their monthly repayments.  Lenders began raising their SVR levels last year and this has put some homeowners into what is being called “mortgage prison”.  Without the ability for some to remortgage their only choice is to face the rising SVR levels put into place by lenders.

The official average SVR from banks and building societies is currently at 4.35%.  In comparison, there are current remortgage offers from lenders below 3.0%.  However, the very best rates, which are most of the ones under 3%, are only available to those with the very best credit ratings and adequate equity levels.

There have been signs that lenders will be offering better rates to those that have previously been shut out of the better interest rates.  The Funding for Lending Scheme put into place by the Bank of England is having a positive impact on mortgage and remortgage lending.  Lenders are becoming more competitive and that should bring better offers to homeowners looking to remortgage and those seeking to get a low interest rate mortgage for a purchase. 

There are still critics of the scheme and they do not believe the impact is going to help those beyond the borrowers that are capable of getting the best offers.  However, there are currently very attractive deals being offered to borrowers and worth consideration by those that may have been disheartened with the deals of a few months ago.