Halifax has announced that it will increase the cap that applies to its standard variable rate (SVR) for some borrowers. The cap will increase from 3% above Bank of England Base Rate to as much as 3.75% above Base Rate.
That may not come as a big surprise to some as this isn’t the first time that Halifax has increased the cap on its SVR. Although there has not yet been any increase in the SVR it would seem a fair bet that this will only lay the foundation for an increase in the interest rate (we’ll keep you updated on the blog).
If the SVR did increase to 4.25% a borrower with a £150,000 25 year repayment mortgage would face an increase in their monthly payment of more than £60 per month. It just goes to underline the fact that borrowers on a SVR can suffer a rate rise at the discretion of the lender despite the fact that Bank of England Base Rate has not moved. With funding costs increased in recent months others may also be feeling pressure to act.
That is bound to act as a trigger for borrowers to review their mortgage arrangement and although the market remains fast paced there are still plenty of deals that could represent a saving. It’s important to understand the options available especially as some products carry large fees whereas others will cover remortgage costs.