Halifax hikes its variable mortgage rateRise in Halifax, RBS and Santander mortgage SVR
06 March 2012
Halifax, the UK's biggest mortgage lender, has followed RBS and Santander in announcing a hike in its standard variable mortgage rate.
Thousands of customers likely to be affected
From 1 May, Halifax will increase its standard variable rate (SVR) to 3.99%. The change (up from 3.50%) is expected to impact around 850,000 customers, potentially increasing individuals' mortgage payments by hundreds of pounds per year. For instance, for a £150,000 mortgage with a remaining term of 20 years, the rate change will add around £38 per month.
RBS and Santander have also increased SVR
Halifax's announcement follows state-owned bank RBS's decision to increase the rates on two of its mortgage products, affecting around 200,000 customers. And last Friday, Santander increased rates for new customers on some products by 0.10%.
Higher costs for mortgage lenders?
Halifax, the lowest scorer in our recent customer satisfaction survey, said that its decision has been necessary because, despite the Bank of England base rate remaining at a record low 0.5%, the costs of funding mortgages have 'increased considerably' in recent years.
Which? mortgage specialist Dean Sobers said: 'Despite the increase, Halifax does actually retain a competitive SVR when compared with other major lenders. Yorkshire Building Society, for instance, has an SVR of 4.99%. What is more worrying for many borrowers is the possibility of other lenders following Halifax's example, significantly increasing the number of customers hit by higher monthly bills, but who may struggle to switch to another provider.
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