Average mortgage SVR ‘above 5% for first time since 2009’

The choice of mortgage products has also dipped as lenders revise their ranges amid economic uncertainty, Moneyfacts.co.uk said.

The average standard variable rate mortgage has topped 5% for the first time in more than 13 years, according to Moneyfacts.co.uk (Joe Giddens/PA) (PA Archive)

The average standard variable rate (SVR) mortgage has topped 5% for the first time in more than 13 years, according to a financial information website.

Homeowners tend to end up on their lender’s SVR when their initial mortgage deal comes to an end.

The average SVR is now 5.06%, according to Moneyfacts.co.uk, up from 4.40% in December 2021.

Moneyfacts said the 5.06% rate is the highest it has recorded since January 2009, when the average rate was 5.14%, as well as being the only month since then when the average SVR has breached 5%.

The increase follows a string of Bank of England base rate hikes.

We have seen some providers pull selected products, while others have withdrawn whole sectors of, or indeed their entire ranges, from the market temporarily

Eleanor Williams, Moneyfacts.co.uk

People looking to come off their SVR and switch to a less expensive deal, however, will find that fixed mortgage rates are generally climbing.

The average, two-year, fixed-rate mortgage on the market is 3.74% – the highest rate recorded since May 2013 – Moneyfacts said.

And the average, five-year, fixed-rate mortgage being offered is 3.89%, which is the highest on Moneyfacts’ records since November 2014.

The average two-year tracker mortgage rate has climbed to 2.74%, which is the highest recorded since June 2014.

Eleanor Williams, a finance expert at Moneyfacts, said the choice of products has also dipped as mortgage lenders revise their ranges amid economic uncertainty.

She said: “We have seen some providers pull selected products, while others have withdrawn whole sectors of, or indeed their entire ranges, from the market temporarily.

“Compared to last month, total availability has reduced by a notable 431 deals to leave 4,556 mortgage products on offer to borrowers this month.”

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Ms Williams continued: “As might be expected following the recent base rate rises from the Bank of England, the average SVR has also risen and at 5.06% is now above 5% for the first time since January 2009.

“Although the difference between this rate and the average fixed rates has reduced in recent months, for eligible borrowers about to fall onto a revert rate, the incentive to lock into a new, fixed deal is still clear.

“Those switching from the average SVR to the current, average, two-year fixed-rate might be able to make monthly savings of nearly £150 (based on on a mortgage balance of £200,000 over a 25-year term).

“While we remain in a cost-of-living crisis, with pressure on many household budgets, it’s vital prospective borrowers explore their options and are not disheartened by recent rate rises.”

Analysis released by trade association UK Finance earlier this month suggests that homeowners coming off fixed-rate mortgages this year and shifting to a new deal can typically expect to see their disposable incomes shrink by 7%.

This expected decrease in the amount of income that households will have left over to spend and save at their discretion is due to a combination of rising mortgage interest rates and the surging cost-of-living.

According to UK Finance, 1.3 million customers are set to reach the end of their fixed-rate deals this year and, unless they re-mortgage, they will move on to their lender’s standard variable rate (SVR).