Standard Variable Rate mortgage customers must not be complacent
Moneysupermarket.com said that the average rate on an SVR deal is now at 4.2 per cent above the Bank of England base rate, currently standing at 0.5 per cent.
This is compared to 2.68 per cent 12 months ago, showing a slow and steady rise that could creep up on mortgage borrowers who assume they will always be getting a good deal.
Hannah-Mercedes Skenfield, mortgages channel manager at moneysupermarket.com, suggested that lenders are still trying to increase their profit margins during the recession .
" Borrowers need to be aware that lenders are free to price their SVR as they please, and therefore an SVR deal might not be the best way to get the most benefit from the low base rate environment," she said.
The Sunday Times recently claimed that discount mortgages may not be the best deals at the moment because they track lenders’ own SVRs, rather than the Bank’s base rate, leaving customers "at the mercy" of lenders.
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