Historical SVRs vs. bank rate

redonion

Since the differences between tracker rates and the base rate are now relatively high (especially for offsets!), I'm now wondering how SVRs have historically compared to interest rates when rates have been much higher.

For example, in the 70s and 80s when the base rate pushed 20% briefly, how did SVRs compare? I assume they were pretty close to the base rate?? And how about in more normal times with say 7% base rate?

I realise SVRs vary between lenders and products, but that doesn't mean there's nothing to know on this subject!

Perhaps this is the wrong question: after all, lifetime trackers are relatively easy to switch away from if rates rise by a lot.

Still, since a selling point of a lifetime tracker is that you don't need to remortgage, typical historical SVR/base rate offsets at times of "normal" base rates would be very interesting to know about.

Moby_Tide

I'd be inclined to rip up history on these things now. Banking and the economy has changed so much in the last decade I think any parallels could be misguided going forward

Thrugelmir

SVR's around 2% higher than base. Lenders now pay far higher levies. So in the future 2.25% to 2.5% could be the norm.

redonion

Thrugelmir wrote: »

SVR's around 2% higher than base. Lenders now pay far higher levies. So in the future 2.25% to 2.5% could be the norm.

...and the offset lifetime tracker rates I've seen are about 3.2% above base!

Having second thoughts about getting one of those, partly for that reason. Every time I think about mortgages I find out something new and change my mind!

The other reason is that the choice is limited and my broker recommended Abbey - and I've heard bad things about Santander messing people around.

opinions4u

I have no recollection of base rate hitting 20%.

That said, base v SVR will, I believe, settle in a range of 2% - 3% apart once we move away from this artificially low base rate.

kingstreet

The highest "normal" SVR I can remember for building societies was 15.4% around 1990. They kept rates artificially low, while wholesale funders and the clearing bank SVRs were higher.