Lender's latest mortgage rates for SVRs are on the up.
Despite the BOE base rate sitting at 0.5 per cent, lenders latest mortgage rates are on the way up.
Households are being squeezed in all directions with high interest rates charged on overdrafts and credit cards and now lenders SVRs are increasing.
Bank of England figures show that the gap between interest charged for an average mortgage and the base rate of 0.5 %, is at the highest level since records began back in January 1995. The average rate for an overdraft has reached 19.5 %, which is also the highest level since records began.
Banks are being accused of profiteering by many home-owners who believe lending rates should remain low while the base rate remains low. Lord McFall of Alcluith who is the former chairman of the Treasury Select Committee has said that it seems the public are losing their trust in the banking sector.
With various lenders recently announcing SVR increases the fear is mortgage rates could rise even further. Figures released by Credit Action show the average UK household debt including a mortgage is £55,988, which is an increase of £150 on the month previous. A rate increase could push some struggling home-owners to the edge financially.
The BBA who represent British banks has defended lenders increasing their latest mortgage rates advising that the gap between the BOE base rate and lenders SVRs will not increase profit margins. The BBA added that funding costs have increased and banks have finally had to pass on these increased costs to mortgage holders.
