Belfast Telegraph

Friday 25 April 2014

Thousands hit by hike in mortgage rates

Mortgage costs for thousands of borrowers will jump from today when one of the UK's biggest lenders hikes its standard variable rate (SVR).

Santander's 0.5% rise to 4.74% will result in an average increase of £26 a month or £312 a year for a typical £100,000 mortgage.

The switch is expected to affect hundreds of thousands of customers, although Santander has not disclosed the figure.

Santander's SVR change, first announced in August, is one of a number by lenders in recent months, dashing hopes that households will see some benefit from the Bank of England's funding for lending scheme.

Santander blamed the increase on its own funding costs and pointed out that similar market dynamics drove its competitors to push up their SVR rates five months ago.

More than a million homeowners saw mortgage rates increase in May as lenders such as Halifax and the Co-operative Bank raised their SVR rates, even though the Bank of England base rate remained at a historic 0.5% low.