SVRs 'become more significant as remortgage deals diminish'

Date:Friday 2nd January 2009
Author: Rachel Fletcher

Standard variable rates (SVR) had a greater effect on mortgage holders throughout 2008 as good remortgage deals became harder to find, it has been claimed.

David Black, principal consultant of banking at finance data provider Defaqto, made the claim after the organisation released information about SVR mortgages for last year.

Citing volatility in the financial markets, he explained that as it became harder for borrowers to secure good remortgage deals, SVRs took on "a much greater significance than in previous years".

Mr Black was speaking as Defaqto released research it had carried out based on the gross interest payable on interest-only mortgages of £100,000 through 2008.

The cheapest deal was found to be from First Direct, whose interest level of £5,918.16 was £1,468.42 less than Northern Rock's.

In October 2008, Mr Black said that rising rates on new mortgages were "sobering".

He commented after Defaqto released mortgage data for the time, comparing it to July 2006.