Will your lender raise its standard variable rate?
The bank rate was kept on hold this week, but despite that some lenders have increased the cost of mortgages
Moves by Halifax, RBS, the Bank of Ireland and, yesterday, Yorkshire Bank to increase mortgage rates for some have panicked borrowers.
But, depending on your current deal, it could be a mistake to rush to fix your mortgage to avoid a hike in the standard variable rate (SVR).
Experts say that the wave of SVR increases in the past week won't spread across the market.
"I don't think that these recent moves will necessarily result in a wave of copycats," said David Hollingworth of London & Country Mortgages.
"Most borrowers on SVR are unlikely to be hit with a rise this year," said Ray Boulger of John Charcol.
But he warned that those borrowers with lenders who no longer offer new mortgages are at the greatest risk of an increase.
"Bank of Ireland highlights the risk for borrowers with lenders which are no longer active," he said.
Bank of Ireland withdrew from new mortgage lending in the UK under its own brand and the Bristol & West brand in January 2009.
But more than 100,000 homeowners still with the lender now face a huge increase in their mortgage payments after the bank this week announced an increase in its SVR from 2.99 per cent to 4.49 per cent.
The rate hike will be introduced in two parts, climbing 1 per cent in June and 0.5 per cent in September. But the move will mean anyone with a £150,000, 25-year repayment mortgage will have to find an extra £122 per month to cover their mortgage payments.
"Many who were very happy to stay with Bank of Ireland while they were paying only 2.99 per cent will now look to remortgage," said Mr Boulger.
However, only those with at least 15 per cent equity in their home are likely to find a cheaper fixed rate for up to five years or a variable rate.
Last week Halifax increased its SVR from 3.5 per cent to 3.99 per cent, hitting some 800,000 customers. RBS and NatWest, meanwhile, raised the SVR for its offset mortgage customers by 0.25 per cent to 4 per cent. Yorkshire and Clydesdale Banks will raise SVR for 30,000 borrowers to 4.95 per cent from 4.59 per cent.
"Some borrowers... who want to continue on interest-only will have become mortgage prisoners," said Mr Boulger.
What about other lenders?
Santander said: "We have no plans to change our Santander or Alliance & Leicester standard variable rates in the immediate future."
The Nationwide has promised that its base mortgage rate would be no more than 2 per cent above base rate.
"We have honoured that promise, and will continue to do so," a spokeswoman said this week.
But Mr Hollingworth said borrowers need to be aware of the potential for increases in rates.
"It would be naive to think there won't be any other lenders keeping their position under review when a lender as significant as Halifax takes the step of hiking its variable rate, despite no change in the base rate."
It was kept on hold this week at 0.5 per cent by the Bank of England.
"Borrowers only really know how their rate will behave if it is directly pegged to the base rate or is locked into a fixed deal," he said.
Independent Partners; request a free guide on NISAs from Hargreaves Lansdown
Pension mortgages: 'The advice I was given was wrong and now I face losing my home'
Best savings rates are not all they might seem
Questions of Cash: I checked in with Air France in time and still missed the plane
Minister's pension promise to firefighters challenged
Gold-plated pensions – the key to retirement freedom?
- 1 PlayStation and Xbox hacked by Lizard Squad
- 3 The Grace Dent Christmas Questionnaire
- 4 The 'Black Museum': After 150 years, public set to see exhibits from police’s grisly crime museum
- 5 Vagina canoe artist defends herself over ‘obscenity’ charges
British actor Idris Elba cannot star as James Bond because he is black, says shock jock Rush Limbaugh
Rozanne Duncan: Ukip expels councillor for 'jaw-dropping' comments made in BBC TV interview
Germany anti-Islam protests: 17,000 march on Dresden against 'Islamification of the West'
Ukip member gets into Christmas spirit with Union Flag plea to Santa 'for our country back'
BBC director Danny Cohen: Rising UK antisemitism makes me feel more uncomfortable than ever
Alex Salmond has 'broken his word to the Scottish people' says Scottish Lib Dem leader
iJobs Money & Business
Not specified: Selby Jennings: SVP Model Validation This top tiered investment...
Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...
£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...
£20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...
Day In a Page
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A deceptively spacious, beautifully presented Georgian home with 3000sq ft of living space and five reception rooms
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens