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Mortgage rate rises set to hit 1.5 million homeowners

Santander set to hike mortgage rates on Wednesday

Mortgage lender, Santander, will increase their standard variable mortgage (SVR) by 0.5% to 4.74%. This will ramp up the cost of mortgage repayments for the 400,000 households currently on the bank’s SVR. A Santander customer with a £150,000 25 year loan paying the SVR will now have to find an additional £500 per year. The average variable rates now stand at 4.27%, the highest level since March 2009. This is coincidentally when the Bank of England dropped the base rate to 0.5%, where it has stayed ever since. 1.5 million households are currently repaying their mortgage on a SVR.

Although SVR often provide a much worse deal than fixed or tracker mortgages, a huge number of people have found themselves on them because customers are automatically shifted onto an SVR after the initial two or three year fixed rate deal expires. To learn more about different types of mortgage read our free guide Mortgages made simple.

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