Halifax forces home movers onto pricier mortgages
3rd February 2010
Britain's biggest lender Halifax is forcing borrowers onto
mortgage deals costing nearly twice as much when they move
home.
The controversial move means thousands of homeowners with
mortgages linked to the bank's standard variable rate (SVR), which
stands at 3.5%, would be pushed onto more expensive fixed and
tracker deals costing them hundreds of pounds extra a month if they
move.
The banks' next best deal after its SVR for those with the
minimum 15% deposit and seeking a set monthly payment is a two-year
fix priced mortgage at 6.39%. The hike in rates would add a huge
£250 to the monthly payments on a £150,000 repayment mortgage.
The policy would inflict a further blow to homeowners whose
homes might have lost value during the economic downturn. This
would leave them with less equity which in turn makes it difficult
to change lender and switch to better deals.
HSBC is also excluding borrowers from attractive SVRs, customers
who started a mortgage with them after 2006 will not be able to
transfer it to their new home.
SVRs are traditionally about two percentage points above fixed
and tracker rates but the low Bank of England base rate has caused
them to plunge, and lenders are keen to prevent borrowers from
capitalising on this.
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