Lenders barring applicants from SVR deals

18 November 2008

As rates plunge to 5% the online mortgage company says lenders including Abbey, Alliance & Leicester, Halifax, Cheltenham & Gloucester, Royal Bank of Scotland and Yorkshire presently don’t advertise SVRs to new applicants.

Rates on SVRs currently vary massively with as much as 2.24% separating the best and worst although the firms.

Mform.co.uk says the huge range in rates, the closure to new business and the introduction of fees on what was the default option shows the mortgage market is still a long way from returning to normal.

Francis Ghiloni, marketing and business development director at mform.co.uk, says: “The lowest SVR deals are currently among the better deals on offer with rates as low as 5% so it is disappointing that new borrowers cannot apply.

“In the past they were the default for borrowers who could not or would not search out better deals and they were attractive purely because of their flexibility which included not charging fees.

“Now there are exit fees and application fees it is even more important that customers assess the true cost of the mortgage."

Ghiloni says lenders must be more transparent with their pricing policies and not charge exit fees on SVRs instead of loading stealth charges such as deferred arrangement fees on to the deals.