SVR 'is offering breathing space to borrowers'

Date:Thursday 12th February 2009
Author: Rachel Fletcher

Borrowers who are unable to remortgage at present have been aided by cuts to standard variable rates (SVR), one advisory firm has claimed.

Surrey Independent Financial Services claims that many lenders have brought their SVRs down following cuts to the base rate of interest by the Bank of England.

As a result, many homeowners have been afforded "a bit of breathing space", according to Bilal Afzal, an independent mortgage adviser at Surrey.

"In most of the cases, people are coming out of their initial promotional rate and finding themselves having to pay even less due to lower SVR by their lenders," he continued.

Mr Afzal also suggested that people who have less than 25 per cent equity in their homes may struggle to qualify for the best fixed-rate and tracker mortgages.

The comments follow a report from the Financial Services Authority which estimated that more than two million residential mortgage holders would be in negative equity if house prices were to fall by 30 per cent from the end of 2007.