Bank of Scotland and TMB increase SVRs

17 October 2011 | By Tessa Norman

The Bank of Scotland and The Mortgage Business are increasing their standard variable rates due to the increased cost of funding.

Their SVRs are going up from 4.84% to 4.95% on November 1.

Both brands are owned by Lloyds Banking Group and are closed to new business.

TMB closed to new business in August 2008 and the Bank of Scotland for intermediaries closed to new business in July 2009.

A spokesman for Lloyds group says: “Bank of Scotland and TMB have written to customers to inform them that their standard variable rates are increasing by 0.11%, from 4.84% to 4.95%, on November 1 2011.

“The 0.11% increase in rate equates to an average change of around £10 a month for customers. This change reflects both an increased cost of funding and the higher capital costs of operating these mortgages.

“The significant majority of borrowers with these brands have non-mainstream mortgages. 4.95% remains a competitive rate for non-mainstream mortgages.”

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Readers' comments (19)

Lesley | 17 Oct 2011 5:49 pm
That is outrageous. It's time the Government stepped in to stop lenders charging such high SVR. Bank base rate hasnt changed and is still 0.5%. What is going to happen to these poor borrowers when the base rate does go up, it's greedy lenders who will be forcing people into arrears just so they can continue to pay high wages & fat bonuses.
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Anonymous | 17 Oct 2011 5:56 pm
Total crooks, the SVR's are above average as they stand!
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Ancient Wisdom...is a broker in N3 | 17 Oct 2011 6:17 pm
..alot of borrowers will be shocked to here this news when they get these letters - and its only going to get worse.

The crash is only going to come when BBR soars to 4% in the nesxt 5 yrs.
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Mike jones | 17 Oct 2011 7:33 pm
Not sure how TMB can say costs of operating these mortgages has gone up, considering thet dont exist anymore and i havent heard anything from them or whoever has taken over running my mortgage.
Its plain and simple profiteering on their part, they know the majority of customers cant remortgage due to negitive equaity etc so just bump up their profits.
A bloody disgrace but nothing we can do
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Anonymous | 17 Oct 2011 11:02 pm
Remind me again of the Bank Base Rate? Bank customers, captive and probably unable to remortgage so they just get screwed over. Where is the TCF?
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James Lindon-Travers | 18 Oct 2011 8:42 am
Both these brands are both well aware that those clients who are sitting on SVR are unable to remortgage elsewhere as they are a legacy of the self cert era. With rampant inflation and a continued credit squeeze this is pure profiteering, which no doubt will contribute towards the LBG Christmas Party. A very unimpressive move.
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Anonymous | 18 Oct 2011 10:05 am
shocking behaviour, the SVR is already too high! This is just pure greed on the lenders part!!
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Suhan Srinivasan | 18 Oct 2011 10:05 am
In LBG's defense, they have the right to increase their SVR. If you do not like it, then you should not choose a SVR product; try a tracker. While not ethical, they are a bank, so it is not that surprising!
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Andy | 18 Oct 2011 10:50 am
GET REAL!! Bank Base Rate is no reflection of the cost of funds to lenders. If you think it is then explain how you can get variable savings rates of 3%? A 5% SVR is not unreasonable against this. It looks daft when you see C&G customers paying 2.5% but they're the lucky ones with a cast iron guarantee in their mortgage contracts. Lloyds would increase their rate too if they legally could. Customers on these high rates need to remortgage if they can. Unfortunately many will be trapped because of increased credit/equity requirements. It's all part of the terrible mess we're all in and we all know that banks have questions to answer. But so do brokers. After all who was it that earned fat fees for putting non-standard cases with these lenders in the first place!!!!
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Luke Atkinson | 18 Oct 2011 11:28 am
I've been saying this for months and Ancient Wisdom is right. This is an increase of 0.11%...wait until the base rate soars, then the proverbial will hit the fan.

This is a tiny % of the self cert market, which TMB and BOS were players in, when the base rate soars the likes of preferred/SPML/MPLC/platform/DB' customers etc etc will be marooned on soaring rates with nowhere to run.

Suhan Srinivasan - how long have you been in the industry? The majority of these customers won't be able to move their mortgage as they are self certs.

Its a gloomy outlook and although most will heckle me for being ''negative'', the vast majority with any knowledge of the industry know those of us who are predicting a rough ride when rates soar, are right.
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