Halifax changes the SVR for new borrowers

by Aaron Strutt

Nov 26 2010

Halifax are increasing their standard variable rate (SVR) for new customers with effect from January 4, 2011.

Existing Halifax customers currently on the standard variable rate are paying 3.5% and they will not be affected. The new higher rate of 3.99% will be paid by new borrowers at the end of their fixed or tracker rate - if they do not remortgage on to a better deal.

There are a number of mortgage lenders that have made changes to their standard variable rates recently, including the Nationwide and Skipton Building Societies. Figures released by the Nationwide Building Society show that their super low SVR has cost them £300 million for the first six months of the year. New Nationwide customers now have a higher 3.99% SVR, instead of the existing customer rate of 2.5%.

The Skipton Building Society went one step further. They changed the mortgage terms and conditions and charged both new and existing customers a higher SVR. They increased the rate from 3.5% to 4.95%.

Aaron Strutt, a broker at Trinity Financial Group, says: "This increase by the Halifax will not be welcomed by any new customers. However, the bank does have a particularly good product transfer policy and the new SVR is in line with other big lenders.

"When customers come to the end of their Halifax rate they should contact their broker who can arrange a product transfer. This will allow many borrowers to switch in to another deal and not pay the new SVR."

November 26, 2010