More lenders have joined in the latest trend of increasing their Standard Variable Rate (SVR). This is the Lenders own rate of interest, and the rate which a customer normally reverts to once their specific product (i.e fixed rate) period comes to an end. The latest change comes from Yorkshire/Clydesdale who increased their SVR from 4.59% to 4.95%. This was following Bank of Ireland (2.99% to 4.49%), RBS (3.75% to 4%) and Halifax (3.50% to 3.99%) over the last couple of weeks. These can affect some existing customers as well as new customers. The general consensus from the lenders was that the changes were necessary to bring them ‘into line’ with other lender offerings. Do you know what yours is? Maybe this is a good time to review your mortgage and the small print? We do tend to see someone lead the way and others follow quickly behind. The most recent example was the restricting of the percentage (of property value) someone could borrow on an Interest Only basis. Now we’ve seen the increase of SVRs. What’s next…? Life is rarely dull in the mortgage world!
On the positive side - we are seeing some of the smaller lenders looking to launch innovative products. Not necessarily looking for huge volumes, but looking to fill gaps in the market and this should be applauded. One such lender has reviewed the options available to those in retirement and above the age of 65. They’ve realised there’s a huge gap (unless it’s an equity release mortgage required) and have launched a variable rate mortgage product specifically designed to assist this type of consumer. This can be on an interest only basis and up
to any age. Income must be provable, whether this is from pensions, investments, rental income, even earned income or off-spring support and must fit the lenders affordability criteria. A max of 40% of the property value can be advanced and there are only redemption penalties in the first year. This makes it reasonably flexible. One final thing, I’m delighted that the lender has made this totally exclusive to AToM and it is the only product of its type in the current mortgage market! What a plug! To find out more about the AToM Retirement Mortgage, please call us, we’d be delighted to assist.
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