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SVR mortgage rate rises - homeowners warned to shop around

By Lucy Bower

2 October2021

The Daily Mail reports that 1.5 million families on SVR (Standard Variable Rate) mortgages could see a rise in their cost of living, as the cost of borrowing reaches a 42-month high. The exact number of people on SVR mortgages is unknown but it is thought to have risen sharply since the Bank of England base rate was cut to 0.5%.

Bank of England figures published yesterday reveal that the average rate of interest on an SVR mortgage is 4.27%. The average variable rate was 4.06% in March 2009, then fell to 3.82%, but it's now the highest it's been for 42 months, at 4.27%.

Homeowners often move onto SVR mortgages at the end of an initial deal, like a two-year fixed loan or tracker.

A spokesperson for mybulesea.com commented: "SVR mortgage interest rates can go up or down. Homeowners with an SVR mortgage need leeway in their budget to accommodate any additional expense incurred when the rate of interest rises."

"Anyone concerned about how they will manage an increase in mortgage payments following a rise in mortgage interest may find it beneficial to speak to a mortgage expert about their situation and see whether there is a more suitable deal out there for them."

"Similarly, anyone struggling to afford debts that are not secured against their property, such as credit cards, overdrafts or personal loans, may find it beneficial to speak to a debt expert about their situation. There may be something that can be done to bring unsecured debts back to an affordable level. An adviser would be able to discuss your options with you."

Tags: mortgage, mortgage rate, mortgage payments, Bank of England

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