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Standard life borrowers face higher mortgage rates

16/11/2007

Standard Life are one of UK’s first mainstream lender which increased its mortgage rates regardless of the Bank of England leaving interest rates unaffected for November period.

They confirmed its standard variable rate (SVR) to increase by 0.15 percentage points to 7.46% during Monday.

Former lenders could now follow suit, analysts explained.

Standard Life’s customers will be affected; especially those mortgages what is linked straight to the SVR. Only recently, deals represented a major part of Standard Life's production.

Today most of its current mortgage deals were connected to a tracker product instead of the SVR. A tracker mortgage robotically follows the Bank of England’s base rate, and due cause to this, results cannot be generated unless the central bank puts its rates up primarily.

Customers on tracker mortgages are in position to switch to the SVR when their current deal finishes, also mortgage holders currently on a fixed rate deal.

A Standard Life spokesman commented: "The change in SVR is a consequence of significant changes to the mortgage market in recent months."


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