The recent 0.25 per cent BBR increase has seen a number of rate changes in the market, with many lenders reviewing their rates accordingly. However, a number of firms have been accused of unjustly increasing rates by more than BBR itself.
Hugh Nichols, partner at Badbury Berkeley Mortgage Services, was unsure how lenders could justify rate hikes above the 0.25 per cent August BBR rise. He said: “I have noticed that lenders have adjusted their product and standard variable rates (SVRs), following the BBR rise. However some mortgage lenders have moved their rates upwards by more than the 0.25 per cent BBR rise. Royal Bank of Scotland (RBS) and some other mortgage lenders have made the move to increase their interest rates by more.”
RBS and Natwest are above the market average calculation of 6.69 per cent, according to Moneyfacts.co.uk, with its rate sitting at 6.89 per cent.
Defending the move, a spokesperson from RBS Intermediary Partners, said: “The RBS and NatWest standard variable mortgage rates are not solely linked to the Bank of England rate, and therefore do not automatically follow any changes to it. The decision to increase by 0.30 per cent has been made after considering the mortgage market and the impact of a low interest rate environment.”
Commenting, Rob Clifford, managing director at Mortgageforce, said: “Mortgage lenders need to have the latitude to change the rates on their products accordingly, otherwise we will have a vanilla market, full of the same kind of products. There is a way to avoid the BBR changes, and that is to buy a tracker mortgage product. I think it is dangerous to tell lenders to not increase their standard variable rates.”
