6 Jan

Lenders 'are actively encouraging borrowers to seek new deals with SVRs'

Lenders 'are actively encouraging borrowers to seek new deals with SVRs'

Lenders are attempting to encourage borrowers to find new mortgage deals by increasing the levels of their standard variable rate (SVR) products, an industry expert has claimed.

Darren Cook, a spokesperson for Moneyfacts.co.uk, commented that financial institutions in the UK have put rates on SVR deals up in an attempt to get borrowers on to fixed-rate deals.

However, he added that many homeowners will be reluctant to shop around while the base rate of interest remains low.

"There is little or no incentive for borrowers, particularly those with little or no equity, to find a new deal when in all likelihood they will have to pay a higher rate," Mr Cook explained.

Moneyfacts.co.uk reported that eight lenders have now increased their SVRs and noted that others are likely to follow suit.

The Bank of England's Monetary Policy Committee is due to meet on January 6th and 7th to discuss interest rates and its policy of quantitative easing.

It lowered the base rate of interest to 0.5 per cent in April 2009 and has maintained them at this level for the past nine months.ADNFCR-1222-ID-19543607-ADNFCR

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