Homeowners have been given notice that they will likely be facing higher interest rate offers on remortgages as well as increases on their mortgage debt interest rates if they pay on their lender’s standard variable rate.  The Bank of England is warning that continued economic problems in the eurozone and the possibility of Greece leaving the euro could push borrowing to more expensive levels.  The result could thrust homeowners that are already struggling to meet expenses to find hundreds to thousands of pounds more per year to meet the demand.

The increase in costs for homeowners will be a trickle down of increased borrowing costs for lenders.  In an effort to gain back profits lost in higher funding costs lenders will offer higher interest rate offerings and increases in their standard variable rate (SVR).

The report from the Bank read, “In the absence of falls in funding costs, it suggests that some further increase in mortgage rates is likely as banks seek to restore their margins.”

Homeowners that failed to secure a remortgage at the end of their current mortgage deal and converted to their lender’s SVR are facing increases already.  Halifax and other big mortgage lenders have already increased their SVR with some planning to do so again.

According to the Council of Mortgage Lenders there are a possible eight million homeowners currently paying on a variable rate which includes both homeowners paying on a SVR and tracker deals.

Remortgage deal offerings are also seeing increases as lenders are pulling their lowest interest rates and replacing them with slightly higher interest rate offerings or not replacing them at all.