Mortgage rate predictions for 2012 fail to highlight SVR increases.

Market forecasters making mortgage rate predictions for 2012 failed to pick up on the recent round of lenders standard variable rate increases.

A standard variable rate is what you generally revert to once your fixed or tracker mortgage deal comes to an end. The majority of SVRs offered are not directly linked to the base rate and so move independently of BOE changes.

Amazingly SVR increases were announced close to the 3rd anniversary of the BOE low 0.5 % base rate. As mortgage rate predictions for 2012 missed pointing out that this could happen, over one million home-owners were shocked to receive a letter notifying them of a rate increase.

The SVR increases started with the Halifax who announced it's SVR would rise from 3.5 to 3.99 % from 01 May 2012. Following close on the Halifax's heals with their own rate increase announcements were RBS/Natwest, The Bank of Ireland and the Clydesdale and Yorkshire Bank

Many thought this would not happen while the base rate remained low but this has proved not to be correct.

Lenders acknowledge that the base rate has not moved and they justify their decision to increase rates saying that funding costs have risen to such high levels, that they have no choice but to pass on these costs to standard variable rate mortgage holders.

The Nationwide however has chosen not to follow the pack and is guaranteeing that their SVR will rise no further than 2 % above base.

After SVR increases have died down what can you expect next for mortgage rates? Well your guess is probably as good as those 'experts' making mortgage rate predictions for 2012.  

No-one can predict the future, but here at Deal Direct  we can help you find a mortgage / remortgage which will protect your future as much as possible and minimise the risks that lay ahead.