SVR Mortgage Rise 07/11

Nickna

I have received a letter today from Direct Line saying the SVR will be going up to 4%, due to increased funding costs, from tomorrow.

Does anyone know the 'funding costs' history behind this?
Should I take this as a sign to change mortgage company?

trulysaintly

Nickna wrote: »

I have received a letter today from Direct Line saying the SVR will be going up to 4%, due to increased funding costs, from tomorrow.

Does anyone know the 'funding costs' history behind this?
Should I take this as a sign to change mortgage company?

It will depend on your T's & C's on your original mortgage offer - lenders can vary the Standard Variable Rate pretty much when they feel like it (unless the T&C's state otherwise).

There are many mortgage holders in the UK unaware of this - some SVR's are linked to the Bank of England base rate (which offers at least some protection) but others aren't.

In that instance when rates begin to rise, some borrowers could be in for a shock as some lenders may raise rates higher than those rises made by the BofE.

Now is the time to review, there's a price war hotting up - many lenders are behind with their lending targets for the year.

Senior_Paper_Monitor

Absolutely on the nail Mr Saintly.

We have given up forecasting when the BoE rate will initially rise (but I've still got 50 resting on September) but we are confident that the scrabble for mortgages in a rapidly esclating fixed/SVR market within a few days of the event will be frantic.