Commenting in reaction to financial journalists speculating on Twitter, Ben Thompson, managing director of Legal & General Mortgage Club, said: “This recent notification merely serves to provide notice that Halifax now reserves the right to increase its current SVR cap which is pretty low at 3.5% compared to some of its competitors.”
Thompson added that the banks had yet to announce an actual increase
He said: “So whilst these 40,000 or so borrowers will worry about what might lie around the corner in terms of possible increases to mortgage payments, they have been benefiting from a low rate for quite some time.
“The notice is more than likely a precursor to a planned increase and no doubt is driven by the increasingly tricky and expensive cost of funding for Lloyds Banking Group and of course its intention to improve results and repay us as tax payers as soon as possible.
“The wake up call to all borrowers is we are now in a record low and benign interest rate environment. Whilst base rate is unlikely to change this or even next year it is worth periodically checking in with an intermediary to see if a current deal can be bettered. Low rates will not last forever.”
Halifax has an estimated 1m borrowers paying its SVR. It is allowed to do this as under mortgage terms and conditions, the cap can be raised with one month’s notice.
It gives the lender room to impose a new higher SVR across all borrowers, one that has been speculated to be set at the same level as the 3.99% homeowner variable rate it recently brought in for new mortgages.
A rise from 3.5% to 3.99% would add £735 a year to the cost of a £150,000 interest-only mortgage.
Halifax declined to comment.
