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Research has revealed that Standard Variable Rate (SVR) mortgage deals are now charging 4.7% on average, a reduction of just 0.98% in twelve months compared to a 2.5% fall in Bank Base Rate over the same period.

Some lenders have increased their margins on SVR deals in the space of twelve months by not passing on the full Base Rate cuts or subsequently increasing their interest rates. 

We are warning the growing band of borrowers sitting on SVR deals, that they might not be getting the full benefit of the record low Bank Base Rate.

Unfortunately it should come as no surprise to anyone that we have seen a steady increase in SVRs since the Bank of England Base Rate was cut earlier this year.

Traffic through our website has shown fewer people each month are looking for remortgage products, and one of the main reasons for this is the growing number of mortgage borrowers happy to revert to their current lender’s SVR rate.

Mortgage borrowers need to be aware that lenders are free to charge their SVR as they please, and therefore an SVR deal might not be the best way to get the most benefit from the low Base Rate environment. We have seen some of the smaller building societies increasing their SVRs so don’t be surprised if we see increases elsewhere in the market.

For those who have built up at least 20% equity in their home, it is likely that you will be able to find a better rate on a three-year fixed mortgage product, at which point the only real drawback from fixing is the arrangement fee, which can be anything from around £1,000 to nothing at all. Those with little equity in their home are in a more difficult position and need to shop around to see what fixed and variable rate deals are available to them.