Halifax Mortgage Rate Increase - Others will follow..

Some advice from Richmond Hill Financial of St Neots

If you are have an existing Halifax Mortgage and are currently on their standard variable rate we though you may appreciate the âheads upâ on the news.

Halifax are increasing its SVR from the current 3.5% for its existing mortgage customers to the 4% level in May 2012. This isnt surprising news as Halifax looks to re shape its business plan and by increasing its SVR will mean it is making a higher margin from its existing client database which would be welcome news to its Board of Directors and shareholders alike â Not the best news for existing mortgage account holders though!

What would this increase mean to existing Halifax mortgage customers?

Any rise on your existing SVR will mean an increase in your monthly mortgage cost. If we assume an increase of 0.5% this would mean on an interest only basis you would pay an additional £4.16 per month for every £10,000 borrowed. A £100,000 mortgage payment would therefore increase by £41.66 per month.

What are your options?

As an existing Halifax mortgage account holder you have 3 options and they are:

1. Accept the new SVR and remain on this rate until such time as you decide to secure a new mortgage deal.

2. Let us secure a new Halifax rate for you â This is also known as a âProduct Transferâ â More details on a product transfer are explained later.

3. Look at a new mortgage deal from a new mortgage lender.

Product Transfers

Halifax will allow us to secure a new rate for any of its existing customers, this rate is known as a âproduct transferâ. These rates are reasonably competitive and involve minimum underwriting and paperwork which cuts down on the general time frames that a standard mortgage normally takes to complete. The benefit is that there is no cost to secure a product transfer rate in a mortgage market where interest rates are rising.

What to do next:

One can only assume that when Halifax SVR is increased that the lender will also increase its âproduct transferâ rates at the same time, for this reason we would suggest that if your current mortgage is either due for review within the next 3 months, or if you are currently on the standard variable rate that you contact us immediately so you can weigh up the options available to you.

One of our advisers will provide you with your options at this time so you can make an informed decision on which route is best for you. In the knowledge that securing a product transfer rate wonât cost a penny what have you got to lose?

Richmond Hill Financial

Tel: 01480 367050