Building society hikes up rates for mortgage customers
February 20, 2010
A building society has recently announced that it is hiking up its standard variable interest rates for customers despite the fact that the base interest rate still stands at its all time low of just 0.5 percent.
The decision to increase its rates has been made by the Skipton Building Society and many of its mortgage customers will be stuck with having to find extra cash each month to cope with higher mortgage repayments resulting from the interest rate increase.
Officials from the Skipton have said that thousands of consumers are likely to be affected by the increase in SVR. The standard variable rate is set to go up on 1st March, and the increase will be a significant one with the rate rising from 3.5 percent to 4.95 percent. The building society had a ceiling limit stating that its SVR would not be any more than 3 percent more than the base rate, but has now raised this ceiling limit in order to increase the SVR.
It is thought that in March around twenty nine thousand Skipton borrowers will be affected immediately, and over the following months a further thirty five thousand will be affected as they come off special deals that they have been on. Many may struggle to find the extra money that they require, particularly given that many face pay freezes or even pay cuts over the course of this year.
A spokesperson from the Skipton Building Society said that whilst the Skipton was focused on customer dedication it could no longer continue to offer the low rates on SVRs. He said: “Our duty for 157 years has been to act in the long-term best interests of all our members - savers and borrowers - and, with base rate expected to remain low for some considerable period, we have reviewed our low SVR.”
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