Trouble ahead with SVRs

Halifax has become the second major lender in as many days to reveal hikes in mortgage costs, confirming it is raising its standard variable rate (SVR).

Some 850,000 borrowers will see their mortgage costs increase as the rate rises from 3.5 per cent to 3.99 per cent from 1 May, due to the “significantly higher” costs of funding a mortgage in the current economic climate.

The average balance of the customers affected is £67,500, meaning payments would increase by nearly £16.40 a month to £498.95 on a capital repayment mortgage with 15 years remaining. This equates to nearly £200 extra a year. Someone with a balance of £100,000 would pay £24.30 extra, the equivalent of nearly £300 more per year.

The move comes after RBS-Natwest on Saturday confirmed it is pushing up rates on two of its products – the Offset and the One Account – by 0.25 per cent, taking them to a rate of 4 per cent, affecting around 200,000 customers.