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SVR Changes to Affect New Mortgages
Lloyds TSB and Cheltenham & Gloucester announced this week that new mortgage deals offered to customers would now revert to a much higher standard variable rate (SVR) when their initial deal expired.
Current customers revert to an SVR of 2% above the base rate when their deals expire. This would mean a rate of 2.5% as Bank of England base rates are currently 0.5%. But from 1 June, new borrowers will have to revert to an SVR without any ceiling, currently set at 3.99%.
Tony Rice, of Bedfordshire-based specialist mortgage and insurance brokers TMP Mortgage Zone, said: "The move by Lloyds TSB mirrors exactly what Nationwide did a year ago. It should encourage all mortgage customers to review the whole of the market when their existing deal expires, and not simply go on to their existing lender's SVR, as they could miss out on a better deal."
[ 27-05-2010 ]
