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N&P defends decision to raise SVR

Norwich and Peterborough has defended its decision to raise its mortgage rate by 0.19% to 6.49%.

This is the first time the society has raised its SVR for 14 months but it has come in for criticism for doing so as there has been no base rate rise to prompt the increase.

Alison Rolls, spokeswoman for N&P, points out that the new rate is still lower than at least 19 other lenders’.

She says: “We had not changed our rate for 14 months and when we looked at it we found we couldn’t afford it any longer. When we lowered our rate 14 months ago we brought it down by 0.25% and we have only raised it by 0.19%. We have made sure it is lower than a lot of other lenders such as Alliance & Leicester and Abbey.”

Rolls also points out that it cost the society 1.7m to keep its rate so low for 14 months.

Melanie Bien, associate director at Savills Private Finance, says it is frustrating when lenders put up their rates without there being any base rate change, although N&P’s rate is still competitive.

She adds: “There are more expensive lenders about, although borrowers don’t pay much attention to the SVR and focus on lenders’ fixed and discounted rates.”

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