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Moneynet: SVR could still suit some customers
While some building societies have been increasing their standard variable rates (SVR) during the low interest-rate environment, the schemes could still suit some consumers, according to an industry expert.
With some rates as high as 5.99 per cent, many will be biding their time before switching to a more secure fixed rate product, but others will most likely be comfortable where they are, commented Andrew Hagger of comparison site Moneynet.co.uk.
"For those who purchased a property ten or 15 years ago when the average price … was £77,968 or £51,084 respectively, some borrowers will be in the fortunate position of having a relatively small balance outstanding in comparison to typical loan requirements of today.
"If for example you have a balance of £40,000 with ten years remaining on the term you'll be paying around £443 per month at a 5.99 per cent SVR. But when you look at the rate and fee combinations available on fixed rate deals, you'll see that there's not really much of an incentive to switch with pricing as it currently stands," he added.
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With some rates as high as 5.99 per cent, many will be biding their time before switching to a more secure fixed rate product, but others will most likely be comfortable where they are, commented Andrew Hagger of comparison site Moneynet.co.uk.
"For those who purchased a property ten or 15 years ago when the average price … was £77,968 or £51,084 respectively, some borrowers will be in the fortunate position of having a relatively small balance outstanding in comparison to typical loan requirements of today.
"If for example you have a balance of £40,000 with ten years remaining on the term you'll be paying around £443 per month at a 5.99 per cent SVR. But when you look at the rate and fee combinations available on fixed rate deals, you'll see that there's not really much of an incentive to switch with pricing as it currently stands," he added.
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Published: 07/01/2010
The information in this article was correct at the time of publication and contains time sensitive data and links, it may not be accurate at the time of reading.