Rates rise hits SVR borrowers hardest
Nov 10, 2006
Mortgage holders who are still on their lender's standard variable rate (SVR) have been warned that they could face a collective bill of £43 million extra each month following the Bank of England's interest rate raise this week. Mortgage broker firm John Charcol warned that a rate increase will mean paying £15 extra per month for the average householder currently on a SVR, adding up to £180 per year.
Analysts widely predicted the increase and a further rise in the coming months is not ruled out. Homeowners on an SVR are already paying over £100 more per month than those on the best deals, research from the company found and while those on a SVR will be hit the hardest by a rates rise, they also have the best opportunity to do something about it.
Senior technical manager at John Charcol Ray Boulger said that although some of the most mouth-watering fixed-rate deals had gone, there were still deals available which were significantly cheaper than a lender's SVR.
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