New mortgage customers at Britain's biggest lender, will be put on a different rate than exisiting customers once their initial deal ends, Clear Property Investment has learned.
Called the Halifax Homeowner Variable Rate (HVR), at 3.99 per cent, the new rate is higher and will not be linked to the Bank of England interest rates. Neither will it be capped. The HVR will apply after January 4, 2011 and not come into effect until the existing deal runs out in 2013.
This follows on from a decision by Lloyds TSB, Cheltenham & Gloucester and Nationwide to replace their SVRs of 2.5% with ones charging 3.99% for new customers.
Stephen Noakes, commercial director of mortgages at Lloyds Banking Group, which includes the Halifax, said: "In light of market conditions, particularly ongoing higher funding costs, we have introduced this introductory rate for new mortgages. The increased cost of funding is reflected in this new rate, whilst remaining competitive for borrowers."
The Halifax decision follows on from that of Nationwide, Lloyds TSB, Cheltenham & Gloucester to replace their SVRs of 2.5 per cent with new charges of 3.99 per cent for new customers. Analysts meanwhile predict other lenders will quickly follow suit.
Melanie Bien, of mortgage brokers Private Finance, told The Telegraph newspaper: "Lenders are constantly looking at ways to improve profit margins, and replacing cheap standard variable rates with more expensive ones is likely to become increasingly common.
"Halifax says it must do this because of the higher cost of funding but lenders are already making significant margins on new mortgage rates. As taxpayer money was used to bail out Halifax when it got into difficulty, this move will be regarded by many as being incredibly cheeky."
Melanie Slade of financial information provider Moneyfacts described the new rate for borrowers as "disappointing" but added: "The 3.99 per cent is in line with other large lenders in the market and well below the average SVR of 4.75 per cent.
"Lenders balance sheets have been dented by borrowers remaining on such low rates, something many can ill afford to allow to continue."
Halifax existing mortgage customers will revert to the existing SVR of 3.5 per cent when their mortgage deal ends. Santander currently has a SVR of 4.24%, Lloyds TSB is at 3.99%, Northern Rock 4.75% and Yorkshire Building Society 4.99%.
For further information on mortgage finance contact any of our Clear Property Investment team.
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New mortgage customers at Britain's biggest lender, will be put on a different rate than exisiting customers once their initial deal ends, Clear Property Investment has learned.
Called the Halifax Homeowner Variable Rate (HVR), at 3.99 per cent, the new rate is higher and will not be linked to the Bank of England interest rates. Neither will it be capped. The HVR will apply after January 4, 2011 and not come into effect until the existing deal runs out in 2013.
This follows on from a decision by Lloyds TSB, Cheltenham & Gloucester and Nationwide to replace their SVRs of 2.5% with ones charging 3.99% for new customers.
Stephen Noakes, commercial director of mortgages at Lloyds Banking Group, which includes the Halifax, said: "In light of market conditions, particularly ongoing higher funding costs, we have introduced this introductory rate for new mortgages. The increased cost of funding is reflected in this new rate, whilst remaining competitive for borrowers."
The Halifax decision follows on from that of Nationwide, Lloyds TSB, Cheltenham & Gloucester to replace their SVRs of 2.5 per cent with new charges of 3.99 per cent for new customers. Analysts meanwhile predict other lenders will quickly follow suit.
Melanie Bien, of mortgage brokers Private Finance, told The Telegraph newspaper: "Lenders are constantly looking at ways to improve profit margins, and replacing cheap standard variable rates with more expensive ones is likely to become increasingly common.
"Halifax says it must do this because of the higher cost of funding but lenders are already making significant margins on new mortgage rates. As taxpayer money was used to bail out Halifax when it got into difficulty, this move will be regarded by many as being incredibly cheeky."
Melanie Slade of financial information provider Moneyfacts described the new rate for borrowers as "disappointing" but added: "The 3.99 per cent is in line with other large lenders in the market and well below the average SVR of 4.75 per cent.
"Lenders balance sheets have been dented by borrowers remaining on such low rates, something many can ill afford to allow to continue."
Halifax existing mortgage customers will revert to the existing SVR of 3.5 per cent when their mortgage deal ends. Santander currently has a SVR of 4.24%, Lloyds TSB is at 3.99%, Northern Rock 4.75% and Yorkshire Building Society 4.99%.
For further information on mortgage finance contact any of our Clear Property Investment team.
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