Standard Variable Rate (SVR) Increase 1st December 2023
What is Standard Variable Rate (SVR)? The interest rate that a mortgage lender sets after a fixed or variable rate mortgage ends. The borrower, if they have not agreed a new deal, will pay mortgage instalments based on this rate. The Variable part means that this rate is not fixed at a particular rate and can be changed by the lender, meaning it can go up or down.
Why does the SVR change? The lender usually uses the Bank of England’s Base Rate (also known as Bank Rate) to help set their SVR. If the Base Rate increases or decreases, a lender’s SVR is likely to increase or decrease. A lender can decide whether to pass the increase or decrease on to their customers.
The Bank of England announced that it was maintaining the Base Rate at 5.25% on the 2nd November 2023. This rate is the highest it has been for a long period of time after fourteen increases.
We have continued to review our SVR, following the Bank of England’s decision to maintain the Base Rate in September. The Society has delayed passing on Base Rate rises to our members as much as possible. Since December 2021, we have only passed on increases when completely necessary and have done so at a slower pace than the upward changes in Base Rate, only increasing our SVR by 3.75%, versus fourteen increases from the Bank of England totaling 5.15% during the same time period.
We are now in a position in which an increase to our mortgage SVR is necessary. After careful consideration, the Society has taken the difficult decision to increase our SVR on mortgage accounts from 7.49% to 8.49%.
This increase to payments will be taking effect for existing members from December 1st 2023. If you have a fixed rate mortgage, your monthly payment will not change at this time. If you have a variable rate mortgage, your monthly payment will increase from December 1st 2023.
We have written to all affected customers and would remind those on standard variable rate (SVR) that we have a variety of fixed and discounted products available which may be more suitable.
We appreciate these are challenging times for members, colleagues and our communities and would like to remind anyone who is struggling to meet their mortgage payments to contact us as soon as possible. We’ve signed up to the governments Mortgage Charter and have a range of options.
if you are concerned about making your payments. If you would like further help and advice on financial support click here for organisations that can help.
