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Lenders are squeezing SVR borrowers, says Which?

Peter-Vicary-Smith.jpg

Which? has criticised lenders for failing to cut their standard variable rates, despite base rate being at a record-low of 0.5 per cent since March 2009.

The consumer champion says 95 per cent of lenders have failed to pass on cuts in base rate to their SVR customers and a fifth of lenders have increase their SVR since March 2009.

It says a rate rise could leave thousands of households in financial difficulty and claims seven out of 10 borrowers are worried about mortgage rates.

The average SVR is now 3.48 per cent above base rate, compared with 1.95 per cent in September 2008.

Which? chief executive Peter Vicary-Smith says: “Millions of people are on variable rate mortgage deals and for many a rate hike could mean they’re facing real financial difficulties.

“Banks have enjoyed increased margins on mortgages for the last few years and when the base rate rises again, few lenders will be able to justify passing the full amount onto their SVR customers.”

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