Debt management for homeowners hit by SVR increase
Debt management for homeowners hit by SVR increase
Thursday 21st January 2010
The lender states that due to "exceptional market conditions", its SVR will increase to 4.95 per cent as of March 1st.
The increase removes the ceiling which previously meant that the majority of borrowers with SVR accounts could not pay more than three per cent over the base rate, which remains at a record low of 0.5 per cent since March 2009.
Skipton Group chief executive David Cutter said the organisation had to consider both borrowers and savers in the current economic climate.
"We have approximately 750,000 investing members to our 100,000 borrowers. UK savers have been the forgotten victims of the credit crunch," he said.
"But their money is now in hot demand as banks continue to reduce their reliance on the wholesale markets. This, coupled with the rates payable by the government's NS&I, has driven up the cost of retail funding to an unprecedented level relative to mortgage rates."
Mr Cutter said while the change would understandably be unwelcome for borrowers who end up paying more as a result, increasing the SVR was a necessary measure in the long run.
Recent research by financial information provider Moneyfacts.co.uk revealed a growing trend among mortgage providers to increase their SVR since the base rate was set in March last year.
Spokesperson Darren Cook said the trend was taking hold, and suggested that as a number of lenders have already taken the step it was "highly possible" that others would follow suit.
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