Mortgage lenders increase standard variable rates

Date:Friday 8th January 2010
Author: Max Freedman

Standard variable rates (SVR) on mortgages are expected to increase in 2010, according to one mortgage specialist.

Ben Wilkie, editor at What Mortgage, said that he believes one or two mortgage lenders will begin to raise the amount they charge on their SVR in the next few months, with the other institutions following their lead soon after.

He added that mortgage lenders should think about shopping around for a better deal, should their rate increase.

However, they should take into consideration the cost of arrangement fees, as this many offset the benefit of finding a lower rate.

"Some borrowers are thinking that maybe now is the time to fix into a deal so they don't get the payment shock when rates eventually do rise significantly," he concluded.

These comments follow the news from that eight mortgage providers have increased their SVR since April 2009, despite the Bank of England base rate remaining stable at 0.5 per cent.