HSBC, Kent Reliance, Aldermore Mortgages, Leeds BS and NatWest have all confirmed that as of 1 December, they will be raising their Standard Variable Rates in response to the recent rise in Bank Rate to 0.5% earlier this month.
Tracie Pearce, HSBC UK’s head of retail, added:
“HSBC’s mortgage rates remain some of the lowest on the market, including our standard variable rate, maintaining our commitment to offer great value for all new and existing customers.”
Kent Reliance will raise both its residential and buy to let SVR by 0.25% points.
TSB, Virgin and Coventry have already increased their standard variable rates.
A recent survey of 2,000 homeowners conducted by the Homeowners Alliance found that more than a quarter of mortgage holders don’t know the current interest rate on their mortgage and are leaving themselves at risk of financial misery by failing to keep informed.
Almost two thirds of adults also admitted to not understanding mortgage terminology. Among the most common areas of confusion are the differences between the base rate and short term variable rate and a tracker versus discounted rate mortgage.
Along with the confusion surrounding mortgages, the survey also found a lack of knowledge about mortgage advice with 38% claiming they simply don’t know what mortgage advice would cost them. Meanwhile 27% of borrowers expect advice from an independent mortgage adviser to be free although this is much lower among aspiring homeowners (17%).
Paula Higgins, the Chief Executive of the HomeOwners Alliance, said:
“A mortgage is likely to be the largest financial commitment you’re ever likely to make so the fact that so many people don’t actually understand the product they’re taking out is worrying to say the least. People are sleepwalking into a financial nightmare in a marketplace where rates will only rise.”
“Consumers must be able to take responsibility for their finances but in order to do this they need access to expert knowledge and guidance. It’s concerning therefore that over a third of borrowers have no idea how much financial advice from a mortgage broker should cost – clearly suggesting they have never sought it.”
“At Homeowners Alliance it has always been our goal to give power back to homeowners, buyers and sellers by equipping them with all of the information they need to navigate the housing and mortgage market. With household debt at a record high the consequences of not understanding your financial situation are very easy to see.”
“Knowing what product you’re on and when your current deal ends is critical to not ending up on a lender’s more expensive standard variable rate. If you’re in any doubt, we have fee-free mortgage brokers and free expert advice covering the basics on our site.”
Despite admitting to being confused over mortgages terms and rates UK adults rate themselves highly for their ability to budget and manage their money (75% rate themselves as good).
The survey found women tend to be less confident than men in rating their knowledge of mortgage terminology despite actually having similar or better knowledge than men on a number of areas.
16th November 2017