Cambridge to hike SVR in September
Ben Thompson, managing director of Legal & General Mortgage Club said the recent rises in SVRs across the market was impacting hundreds of thousands of customers.
He said: “This increase has happened despite the fact that the Bank of England Base Rate has remained at 0.5%. This is possible, because unlike a tracker, SVR doesn’t ‘track’ above the Base Rate at a set percentage; lenders are able to alter it as and when they need to.
“It is usually the wider cost of funding which pushes up SVR, and as there have been moves decrease these costs to lenders, borrowers can be hopeful that we won’t see too many more institutions following suit.
“Although nobody wants their mortgage rates to rise, today’s rates have to be considered in the wider context, and by historic standards they are extremely low.”
But Thompson added that the latest rise would mean more consumers needed remortgage advice and suggested brokers get in touch with affected clients.