Mortgage rates up as lenders get into gear
Standard variable mortgage rates (SVRs) from many of the big lenders have risen in the past few days to shadow the 0.25% rise in Bank Rate made by the Monetary Policy Committee (MPC) at the Bank of England a few weeks ago.
Abbey, Royal Bank of Scotland (RBS), Alliance & Leicester (A&L) and Woolwich have all put up their rates, with A&L and RBS increasing theirs by more than the 0.25% levied by the MPC, making a difference to those who have made a UK investment in property.
Although the SVRs quoted by lenders are not actually paid by many borrowers, they are a valuable benchmark for comparing the costs of homeloans. A&L, for example, pointed out that only 11% of its total number of borrowers are paying the SVR.
Many lenders still have to make a decision about their rates, but Bernard Clarke of the Council of Mortgage Lenders (CML) said: “There is nothing unusual about some lenders being slower than others when it comes to changing their mortgage rates.
“There are a variety of factors holding them back. Their perception of where interest rates are going is one, where they want to position themselves commercially and the costs of managing the process.
“Some may just not have made the decision yet.”