Remortgage - Question about SVR

dean_ham

Hi everyone, i was a first time buyer 2 years ago and my fixed rate mortage with santanderr has run out and now im on the SVR of 4.3%.

House worth £155,000
Mortgage remaining £96,500
LTV 62%
Debts £0

Im contemplating going for the ing direct deal of 1% below their SVR which is 3.5% for 2 years with no fees.
http://www.ingdirect.co.uk/mortgages/variable_rate/variable_rate_remortgaging.asp

I am gambling with the fact that interest rates wont rise much as they are expected to at the end of the year. But if they do, so will my santander SVR rate. Wont it be worth me switching over to the ING?

My question is basically the current SVR for ING direct is at 3.5%. If the base rate increases from its current rate of 0.5% to say for example 1.5% does this mean that the ing direct SVR will go in line with the increase... so increasing from 3.5% to 5%?

As i said im new to remortgaging would just like to clarify the situation before i comit myself to anything

Thanks for your time.

Dean

dimbo61

You are right Dean if the BOE base rate increases so does the SVR and hence your mortgage.
we know very little about you and how much you have paid off over the last 2 years but you have to work out how much moving lender will cost and will Santander increase there SVR as soon as the BOE rate goes up ?
If you need security there are some very good long term 5 year fixes under 5%

noodle

An SVR is not strictly linked to base rate (that's what base rate trackers do) so whilst one might expect it to move up (or down, should the opportunity arise) with the base rate, it might not. A lender can vary their SVR as they see fit.

As an aside, your mortgage numbers aren't a million miles away from mine - and I got a much lower rate from HSBC on a lifetime tracker with no fee or tie in. If you've gone through a broker then, as I understand it, they won't have recommended HSBC as HSBC don't go via brokers (or, at least, don't pay comissions)

dean_ham

Thanks for the replies. The origional mortage was for £100,300 amount outstanding after 2 years £96,500.

I can understand the SVR will change as the BOE base rate changes.

If I (and many other people) take out the ING mortage which is currently offering 1% below their 3.5% SVR for 2 years with no fees. Whats stopping ING increasing their SVR next week to 10% ? Ok i can understand if the BOE base rate increases so would lenders SVR's.

Is it just a case of ING lowering their SVR to a low 3.5% get as many customers on board as possible tie them in for 2 years. Then increase the SVR (even if the BOE base rate hasnt been increased)?

AJK_3

dean_ham wrote: »

Thanks for the replies. The origional mortage was for £100,300 amount outstanding after 2 years £96,500.

I can understand the SVR will change as the BOE base rate changes.

If I (and many other people) take out the ING mortage which is currently offering 1% below their 3.5% SVR for 2 years with no fees. Whats stopping ING increasing their SVR next week to 10% ? Ok i can understand if the BOE base rate increases so would lenders SVR's.

Is it just a case of ING lowering their SVR to a low 3.5% get as many customers on board as possible tie them in for 2 years. Then increase the SVR (even if the BOE base rate hasnt been increased)?

http://www.ingdirect.co.uk/mortgages/apr.asp

As you can see from their website ING Direct's SVR has been 3.5% for over 2yrs now.