Halifax is increasing its reversion rate for new mortgage customers from January 4.
The new rate, which is called the homeowner variable rate, is priced at 3.99 per cent. Existing Halifax customers will remain on the lender’s current standard variable rate, which is 3.5 per cent.
New customers taking a mortgage from January 4 will not revert to the homeowner variable rate before 2013.
The rate does not have a cap and is not directly linked to Bank of England bank rate. It allows unlimited overpayments without any repayment charge. Halifax says the move “reflects the ongoing higher cost of funding, in both the wholesale and retail markets”.
Lloyds Banking Group commercial director of mortgages Stephen Noakes says: “In light of market conditions, particularly ongoing higher funding costs, we have introduced this new rate for new mortgages. This increased cost of funding is reflected in this new rate, while remaining competitive for borrowers.
“Customers will not revert to the new rate before January 2013 at the earliest. Introducing the Halifax homeowner variable rate will enable us to continue to offer a wide range of competitive products.”
Chadney Bulgin mortgage partner Jonathan Clarke says: “It is a shame but I think they are just aligning themselves with other lenders. It was inevitable.”