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Halifax increases SVR to 3.99%

Close to a million Halifax borrowers are facing a hike in their mortgage payments after the lender announced it is increasing its standard variable rate.

Halifax’s SVR will increase from 3.50% to 3.99% on May 1, affecting some 850,000 customers.

Its SVR is now aligned with its homeowner variable rate, the reversion rate it introduced for new customers at the beginning of 2011.

The lender announced earlier this week it was increasing its SVR cap from 3% above base rate to 3.75% above base, and has today confirmed it will be increasing the SVR itself.

For a customer with a £100,000 mortgage balance and 15 years of the term remaining, the change will equate to a £24.30 increase in their monthly payment.

Halifax is offering affected borrowers a product transfer option of a fee-free two-year fix, which has a rate of 3.49% at 60% LTV and 3.74% at 75% LTV.

Ray Boulger, senior technical manager at John Charcol, says there are cheaper two-year fixes available in the market so this option would only appeal to those who are unable to remortgage elsewhere.

He says: “This represents a huge remortgage opportunity for brokers. The rate rise will be a big catalyst for Halifax borrowers to review their mortgage options, and a large proportion of the lender’s book will be up for grabs.”

Stephen Noakes, mortgage director at Halifax, says: “In light of market conditions, particularly ongoing higher funding costs, it has been necessary for us to review the Halifax SVR. At 3.99%, the rate more accurately reflects the cost of funding a mortgage, but it remains competitive for borrowers.”

In February 2011 Lloyds Banking Group paid £500m in compensation to 300,000 Halifax borrowers after admitting its contract was not clear when it increased its SVR cap from 2% above base to 3% in September 2008.

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  • Karen 11th March 2012 at 8:28 am

    I was made redundant and set up a limited company to make ends meet due to salary drops. My tracker ended and variable was the only route and now with this increase within 6 months my mortgage will have increased by £200. Plus at 41 I’ve found after years of trying I’m pregnant and due when the letters are due out to tell me of my increase. Options there are none, firstly they appear to have down valued property, so the ltv is low are therefore the fixed rate is higher than the new stv. New business so no stp and all they will offer is interest only. I’ve tried to arrange a deal where I pay the rate I’m on if they will fix it now. Thanks Halifax stress on the baby is great. No one can help they hold all the cards as I can’t move lender. Everyone gets rich but the decent people who are struggling to make ends meet by working hard. I was treated badly by them and by the system. Get real, gas is up, fuel is up, food costs up and many are out of work and trying to make it under their own steam. For us there is no help.

  • Lorraine 7th March 2012 at 1:16 pm

    Looks like Halifax are not the only Lender looking to increase, I have just received a letter direct from Bank of Ireland confirming that my SVR is going up from 2.99% to 4.49% by September

  • Toby 6th March 2012 at 3:06 pm

    @ City Boy
    I believe you have the wrong end of the stick lol, perhaps stick to selling windows. Ketan has a point, its not positive news, just realistic.

  • Toby 6th March 2012 at 3:05 pm

    @ City Boy
    I believe you have the wrong end of the stick, perhaps stick to selling windows. Ketan has a point, its not positive news, just realistic.

  • Ian Mc 5th March 2012 at 5:16 pm

    3.74% is a direct deal. Check out halifax.co.uk
    Halifax are dual pricing on product transfers. Another great way of treating customers fairly whilst at the same time rewarding the broker community.

  • City Boy. 5th March 2012 at 5:09 pm

    @ Ketan Yadav if you managed your mortgage correctly and made lump sum payments when the rates were low, there shouldnt be an issue moving your mortgage. An opportunity has presented itself and you would rather view it as a negative instead of going out there pro-actively contacting your existing book to generate more business. Dont look a gift horse in the mouth springs to mind………

  • Craig Hudson 5th March 2012 at 3:40 pm

    Been on to Halifax
    3.99% to 75%
    No record of a 3.74% according to the helpline ??

  • Ian McFarlane 5th March 2012 at 12:02 pm

    It is really disappointing to see The Halifax introducing Dual Pricing to its retention products. This is not treating customers fairly.

  • Ketan Yadav - Avenue & Co Private Finance 5th March 2012 at 9:45 am

    Remortgage Frenzy? – well, borrowers face much stricter new lending requirements, especially self employed. Add to that it’s repayment only above 75% LTV, lenders across the board having increased rates over the last few weeks and surge in applications requiring lenders to withdraw products, more downvaluations and stricter affordability criteria means many will remain MORTGAGE PRISONERS. Lenders 2 – Borrowers 0.

  • Tom Cleary 5th March 2012 at 9:45 am

    I understand that funding issues have led to this increase but only for new lending. I fail to see how they can justify this for exisisting borrowers…

  • verma 4th March 2012 at 6:26 pm

    remortgage frenzy!

  • shane 4th March 2012 at 2:44 pm

    Another warning shot to all those people we see that are happy to sit on SVRs’. Sit this announcement alongside the TMW/BOI debacle and people will start to get nervous now they realise the banks can change the rate with relative ease.

  • Rob Barwell 4th March 2012 at 10:30 am

    at last some good news for the mortgage broking world. Since Halifax “blinked first” a number of lenders will follow suit giving us brokers a nudge to get in touch with clients who have been sitting pretty on minute SVRs