Skipton to scrap SVR ceiling and hike rate
Share
Skipton Building Society is to scrap the ceiling on its standard variable rate meaning it will rise from 3.5 per cent to 4.95 per cent from March 1, Money Marketing understands.
The lender will temporarily remove its ceiling, which meant that customers would never pay more than 3 per cent over the base rate.
It is understood the lender is blaming unprecedented market conditions for the move and that it plans to reintroduce the ceiling rate once market conditions improve.
Skipton has also made amendments to their arrears payment charges. Previously, the lender charged a monthly fee of two per cent of the arrears balance, up to a maximum charge of £100.
Under its new arrears charging policy, customers will pay a flat fee of £40 per month, from the first month they go into arrears, rather than from the second month in arrears as they did previously.
Skipton Building Society head of credit management Carole Cox says customers have been written to, explaining the changes and that the change to arrears charges means that many borrowers will pay less.
She says: “We continually review our arrears management processes to ensure they reflect current best practice and remain appropriate to the needs of our borrowers and our business.
“Whilst it is true that following our most recent review the new flat fee of £40 is being charged at month one rather than in month two as it was previously, it does not rise in line with any further increase in arrears as the old percentage fee used to and reflects the work which is undertaken at the very early stage of arrears where a proactive approach is taken by the society to ensure our borrowers are helped back on track as soon as possible.
“This means that many of our borrowers will be charged less, not more.”
If you enjoyed this article, sign up here to receive daily email updates from Money Marketing and Follow @_moneymarketing
View results 10 per page | 20 per page | 50 per page
Readers' comments (49)
Anonymous | 20 Jan 2010 5:43 pm
One way to lose your loyal customers who have been waiting to come off a fixed rate for months and benefit from low interest rates.....
Good-bye Skipton
Unsuitable or offensive? Report this comment
Anonymous | 20 Jan 2010 6:01 pm
Will they be the next Society to need rescuing?
Unsuitable or offensive? Report this comment
HPC member | 20 Jan 2010 6:02 pm
It is about time interest rates were increased. Mortgage debtors are the minority of this country. Savers are the majority. I shall be putting my money in the Skipton.
Unsuitable or offensive? Report this comment
Anonymous | 20 Jan 2010 6:02 pm
just goes to show lenders are trying to make as much profit whilst they can.
surely a maximum of 2% above base should be the norm for SVR's. can they not make a profit on this!
Unsuitable or offensive? Report this comment
Anonymous | 20 Jan 2010 6:11 pm
This is outrageous. A sudden increase amounting to a 42% rise in mortgage costs for previously loyal customers??? Skipton need to have a rethink and apply this only to new customers otherwise we will leave in droves
Unsuitable or offensive? Report this comment
Foxy | 20 Jan 2010 6:11 pm
Others to follow suit shortly...?
Unsuitable or offensive? Report this comment
Anonymous | 20 Jan 2010 6:14 pm
I think you will find that skipton will not be borrowing money at the 0.5% base rate. They will be borrowing this money at a much higher rate hence why the need to increase their SVR.
If you can not afford a mortgage at 5% should you really have a mortgage??
Unsuitable or offensive? Report this comment
IFA | 20 Jan 2010 6:18 pm
All Skipton mortgage offers state that the SVR will not exceed 3% above BOE base rate. This is not inforceable. Mortgage customers should refuse to pay the increase and refer the lender to their own mortgage offer.
Unsuitable or offensive? Report this comment
Mortgage broker | 20 Jan 2010 6:24 pm
How can Skipton change a mortgage condition thats states the maximum is 3% over the Bank of England rate. This is illegal and not inforceable. Not a small increase either ....42% hike,,, Thats treating customers very fairly Mr FSA.
Unsuitable or offensive? Report this comment
Anonymous | 20 Jan 2010 6:24 pm
IFA.
I think you will find that the offer states in exceptional circumstances, as an IFA you should know what exceptional circumstances means. If not then check the bank of England website and start re-training. As a loyal saver who has had to suffer low interest rates over the past year I am happy that this is happening
Unsuitable or offensive? Report this comment