Increase in SVR 'could leave lenders stranded'

Date:Monday 25th January 2010
Author: Susanna Kavka

Mortgage lenders struggling with their finances could find themselves in even more difficulty if Standard Variable Rates (SVR) continue to increase, it has been suggested.

For the last year the low price of SVR has proven to be a safety net for many homeowners, but as this appears to be ending it could be a difficult time for those who are already in financial hardship, Hannah-Mercedes Skenfield, the mortgage channel manager at has said.

Skipton Building Society has been the first of the major institutions to announce an increase in its SVR, raising the rate to 4.95 per cent from March 1st. However, the company claims that this total is still below the average of 5.12 per cent.

But it is likely that the other banks will now follow suit and begin increasing their rates as they attempt to recoup some of their losses. As a result of this it is vital that borrowers remain vigilant about their own rates increasing, Ms Skenfield has warned.