Skipton has dropped its mortgage variable rate rate from 5.49 per cent to 4.99 per cent although this remains above the industry average of 4.87 per cent. Customers who took out a loan with the society before 30 December 2009 would move onto its standard variable rate, which was capped at 3 per cent above base rate. But those who have taken out a loan since then have reverted to its MVR.
Precise Mortgages has also reduced its reversion rate for “almost-prime” products to 4.99 per cent, down from 5.52 per cent.
Data from Moneyfacts.co.uk shows average reversion rates have remained relatively flat over the last two years at 4.87 per cent.
Middleton Finance managing director Daniel Bailey says: “The move from Skipton took me by surprise. Of course we had some lenders increasing their SVRs a couple of years ago and in the meantime no one else has really decreased theirs. It could be a marketing ploy to grab some headlines but either way it helps borrowers and is a positive move.”
Start Financial Services manager Tom Cleary says the decision is likely to have been influenced by increased stress-test requirements introduced by the Bank of England, which will require lenders to stress-test borrowers against a 3 per cent increase in base rate from October.
He says: “With the Council of Mortgage Lenders predicting that lending is going to be very strong in the second half of the year, Skipton may have felt it was going to lose out on market share.”