standard variable rates

wippenskipper

Hi

I would like to risk getting a standard varibale rate mortgage at 75% LTV. Guess what i can't find any. Yes our state owned banks seem to be forcing me to take fixed a rates miles above the base rates. Can anyone recommend a good deal?

Thanks

nw_man

No one is going to let you go to them on their SVR.

If you want a good deal, may I suggest you find an IFA or mortgage broker.

Mrs_Bumble

A standard variable rate mortgage would be risky, is there a reason that you want one? A lender can change the SVR at any time, purely a business decision has no real relation to bank base rate, libor or swap rates.

Joe_Bloggs

It would be helpful if mortgage lenders described their SVR in terms mentioned by Mrs Bumble. From memory the the overall interest rate/ cost for comparison is dominated by the SVR value. This value would kick in after a five year fixed deal for the remaining 20 years of a 25 year mortgage. Since this SVR value can be anything in the future then what is the point of a cost comparison today?
J_B.

Mrs_Bumble

The cost comparison is useful in that it gives you an idea of how much you are going to repay during the term of the mortgage. It is a very good incentive to make sure that the term is kept as low as possible, you overpay wherever possible and don't pay too much in interest to the lenders!

Joe_Bloggs

@Mrs Bumble
I agree with everything you said. I state further that the future costs ,based on SVR , are still a projection that need not have anything to do with the reality of today or the uncertainties over the next 25 years.
J_B.

figgles

Virgin One, First Direct Offset type?

wippenskipper

thanks for the advice figgles offset do seem to offer a very good rate!!!:beer:

wippenskipper

Mrs_Bumble wrote: »

A standard variable rate mortgage would be risky, is there a reason that you want one? A lender can change the SVR at any time, purely a business decision has no real relation to bank base rate, libor or swap rates.

This is very interesting! if my mortgage providers standard variable rate is likely to rise signifcantly in the next five years why are the banks not more willing to sell them!

If i did take out a svr and my mortgage provider raised my rate would i be free to go to another provider who offered a better rate?

Mrs_Bumble

Like I said the SVR is purely a business decision and usually is where they make some money, so no telling where it will go but my personal opinion is it is more likely to rise than fall much.

Usually when a lender offers a fixed rate mortgage deal at XYZ rate it is a tranche of money that they have bought in at ZYX rate, they then know exactly what money will be made out of it for that period of time and when the money is all allocated that product is withdrawn.

At the end of a mortgage product term the product tends to revert to the SVR, so the money is not new money it was already lent and so they make money on it.

So for a lender to lend purely on the SVR at the moment would mean that it would have to be from funds that they have available in-house so to speak, and so in my opinion that is why you are not seeing them readily available.

Depends on the terms of the SVR product really, if there are no Early Repayment Charges then you would be free to move but obviously the gamble then is what interest rates will be available then.

ILW

Pretty sure there are trackers on offer.