850,000 borrowers hit by Halifax rate rise
The average balance of these customers is £67,500 meaning a typical monthly payment will rise by £16.40 as a result of the change.
A product transfer option with no product fee is available for borrowers who would like to change products.
For example, a customer at 60% loan to value would be able to apply for a 2-year fixed product at 3.49% with no product fee.
Customers do not have to pay an early repayment charge to redeem an SVR balance. This means that customers who wish to transfer their SVR balance to a new product with Halifax or another lender would not incur an early repayment charge.
Halifax said the change acknowledged that the cost of funding a mortgage in today’s market remained significantly higher than the longer term average.
The increased rate reflected the fact that raising money through retail savings and in the wholesale markets was currently very expensive by historical standards.
Stephehen Noakes, mortgage director at Halifax, said: “In light of market conditions, particularly ongoing higher funding costs, it has been necessary for us to review the Halifax SVR.
“At 3.99%, the rate more accurately reflects the cost of funding a mortgage but it remains competitive for borrowers.”
Should the Bank of England base rate change before 1 May 2012 then the SVR may be reviewed.