Homeowners with Halifax SVR Mortgages to See Cap Increase
Homeowners that hold a Halifax mortgage may soon see their monthly payments rise. Halifax, a part of Lloyds group, is looking to raise the cap on their standard variable rate (SVR) on March 31 from 3 per cent to 3.75 per cent. The lender has written the 40,000 borrowers that obtained a mortgage before September 2007 that would be impacted by the cap increase to the SVR to inform them of the increase.
Andrew Montlake of adviser Coreco Group remarked that this would be stressful news to those households that are having a hard time in this economy. Mr. Montlake said “For some, low interest rates are essential to keep meeting the monthly payments in these difficult times and if Halifax raises their rates too early this could cause more issues.”
Mark Harris, chief executive at SPF Private Clients suggests that homeowners worried about the cap increase should consider a remortgage. Mr. Harris said, “It looks as though Halifax customers currently enjoying one of the cheapest SVRs, at 3.5%, will soon be paying more for their mortgage.
“Customers who thought they were protected by the cap will be angry about this move but it is sadly inevitable that Halifax would want to improve margins on its SVR. Borrowers should check whether they would now be better off remortgaging, particularly if they have significant equity in their home.”
Remortgages are currently very cheap and homeowners willing to do some shopping will find some with high loan to value levels that will help out those with little equity.