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Largest mortgage lender increases mortgages

After 3 years of rock bottom mortgage rates, mortgage lenders are adding an increase to their standard variable rates. The bank of England set the base rate 3 years back, but The UK’s largest mortgage lender increases mortgages as money markets rise.

Halifax, part of Lloyds Banking Group and the Royal Bank of Scotland and NatWest customers will notice the changes from May 1st on an increase to their standard variable rates.

The average person will find an increase of £300 to £500 increase a year. Halifax, has written to its customers indicating that it is raising the cap on its SVR to 3.75pc above Bank of England Base Rate or 4.25pc. These customers are the only ones who have this guarantee. However, hundreds of thousands of other customers will also suffer if the bank raises its SVR by quarter of a per cent, as this is the rate most mortgages revert to when they come to the end of their initial period. This rate is currently 3.5pc, equivalent to the current cap of 3pc above Bank Rate.

Why would the largest mortgage lender increases mortgages

Why would the largest mortgage lender increases mortgages

The banks have increased the mortgage rates because the “cost of borrowing on the money markets has risen” over the last year and “costs need to be passed on to customers”.

What do you think? Do the banks really need to increase mortgage rates as the recession continues to affect the UK?

posted by Zane in Lending,Mortgage and have No Comments

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