Lender increases Standard Variable Rate

Posted on 4 July 2008 by Ray Boulger

1 comment(s)

We have seen some interesting pricing moves in the mortgage market over the last couple of days – some good news and some bad but more good than bad.

Dunfermline B S has increased its SVR by 0.15% to 7.29% and introduced a 1% Early Repayment Charge for 1 year for any new mortgages taken out on this rate. However, at least they are still accepting new applications for their SVR, whereas Bank of Scotland, which at 7.35% has one of the highest SVRs of any major lender except Northern Rock, will no longer accept new applications on their SVR. A summary of other changes from the top 4 lenders is:

  • C&G made some modest cuts in their fixed rates yesterday.
  • Abbey reduced many of its fixed and tracker rates up to 75% Loan to Value (LTV) today.
  • Halifax is cutting some tracker rates but increasing some fixes tomorrow.
  • BM Solutions is tomorrow cutting rates by up to 0.4%.
  • Nationwide next Wednesday is cutting its 2 year fixed and tracker rates by up to 0.27%.

With lenders going in different directions on fixed rates and several cutting tracker rates we seem to have arrived at a situation where supply and demand in the mortgage market are now broadly in balance. That is, of course, only because because lenders have choked off some demand by cutting out higher LTV mortgages and putting rates up, but at least it would suggest that lenders' criteria shouldn't need to be tightened much further.

There is plenty of pent up demand waiting for lenders to increase their LTVs, which I don't see happening for some while, but at least the thought that criteria is unlikely to be tightened much further offers some comfort.

Categories: Mortgages, Interest rates

Reposessed Landlord blog says:

There's only one problem Ray, you're average bank would have to be mad to lend at above 75% LTV and three times income.

Negative equity people will just walk.
Posted on 04/07/2008 19:56 by Reposessed Landlord blog

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