Skipton raises SVR to 5% for new borrowers

By James Coney

 

Skipton BS is putting in place minimum interest rates for homeowners who choose to pay the building society's standard variable rate when a fixed or discount deal expires.

Skipton Building Society

Lower limit: Skipton has a confusing list of rates for customers

Some new borrowers with Britain's fourth-biggest society will be charged a minimum of 5% if they move to SVR. Others will be charged a minimum of 4.5%.

But existing customers will still be allowed to pay its actual SVR of 3.5% - one of the lowest on the market.

This confusing mix of charges is to help the society fund new home loans.

By imposing floors on the SVR it prevents new customers from moving on to a deal that is unaffordable for the building society.

But the difference in repayments for customers can be huge. For a typical £150,000 loan those on 3.5% would pay £751 per month, those on 4.5% will pay £834 and those on 5% £877.

David Hollingworth from brokers London & Country says: 'You will need to check the small print of your deal very carefully to see which rate you qualify for.'

Meanwhile, borrowers with Accord, part of Yorkshire BS, will see a hike in their repayments after the lender hiked its standard variable rate.

Around 14,000 Accord customers on SVR will see their rate rise from 5.34% to 5.99% from November 22. Repayments on a typical £150,000 loan would rise from £907 to £966.

During the mortgage boom years Accord offered deals to regular homebuyers through financial advisers. A spokesman says the rate increase was made because of the pressure of financing existing deals.

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