Homeowners Facing Tough Decisions with Rising SVRs
Homeowners that have had their current mortgage deal end are switched over to their lender’s standard variable rate (SVR). Due to the low interest rates many lenders’ SVRs are cheap. This has allowed homeowners to pay with low rates and skip finding a new remortgage deal. There are of course many homeowners that cannot remortgage and are stuck on their lender’s SVR. Either way, those paying on a SVR will soon be paying more.
In the last few weeks lenders have chosen to pass along the growing costs of lending to customers by raising their SVR. The increases announced so far have come from Halifax, Bank of Ireland, Clydesdale and Yorkshire and there are likely to be more to follow.
Halifax will be raising their SVR on May 1 from 3.5 per cent to 3.99 per cent. The Bank of Ireland’s UK arm will increase their SVR from 2.99 per cent to 3.00 per cent in June and then will increase the rate again in September to 4.49 per cent. Clydesdale and Yorkshire will rise from 4.59 per cent to 4.95 per cent on May 1.
Experts are quick to remind homeowners that these rates are still cheap when compared to rates present before the end of the credit crisis. Yet, for those that cannot handle an increase due to a tight household budget the impact can be hard financially. A remortgage can help give security against the rising costs being imposed by lenders. Homeowners should seek out the help of a remortgage broker if they feel they have a complicated remortgage or need helpful advice.