Lenders have been slowly following the actions of Halifax in raising their standard variable rate (SVR).  Over the course of a few months the Co-operative Bank, Yorkshire Bank and Clydesdale Bank, the Bank of Ireland, and others have raised their SVR in amounts of 0.25% to 1.0%.  For those homeowners that had their mortgage deals end and converted to their lender’s SVR it was a wake-up call that required shopping around for a new remortgage deal.

Santander has announced that they too are going to be raising their SVR by 0.50% to 4.74% in October. 

The government has launched a program to offer funding to lenders at rates lower than what is available on the global lending market.  This is helping lenders to offer loans at low interest rates and the benefits of the funding is putting lower remortgage deals onto the market for homeowners.  Competition is mounting between lenders and while they may be raising their SVR there are many that are offering competitive and attractive remortgage deals.

Ben Thompson, Legal and General Mortgage Club’s managing director, sees the raising of SVR levels as an opportunity for homeowners to take advantage of the current remortgage offers on the market.

Mr. Thompson remarked, “Figures from the Council of Mortgage Lenders (CML) show that remortgage activity peaked at 51% in Q3 2008. However, since that time and in the wake of the financial crisis numbers declined steadily to a low of 23% in Q3 2010. In the last 12 months quarterly figures have held steady at 29% showing that this area of the market is starting to get back on its feet.

“With the prospect of increased market stimulation from the government’s Funding for Lending Scheme and a price war getting in to full swing we may see the number of remortgages in the UK start to climb once again. Although these figures will not filter through into CML stats until Q4 2012 the hope is that the relief will be felt far sooner by borrowers.”