Best Financial Markets Analysis Article Base rate has been at an all time low of 0.50% for the last ten months and with no incentive to move on to a new deal, increasing numbers of borrowers have moved onto their lenders’ standard variable rate (SVR).

While some borrowers benefit from the cut in base rate being passed on in full, others have not been so fortunate, with a difference of £5,670 between the cheapest and the most expensive lenders.

See appendix for full list of cost of remaining on each lender’s SVR for the last year.

Michelle Slade, spokesperson for Moneyfacts.co.uk commented:

“Many lenders’ SVRs have become disjointed from base rate, with only a fraction of the cuts having been passed on.

“Many smaller building societies have passed on a fraction of the base rate cuts in a bid to deter borrowers from languishing on the SVR.

“Some borrowers on SVR may have paid more than double for the same mortgage than if they had been with a different lender.

“Those that have remained on the highest SVRs are likely to be those with little equity, which diminishes their options.

“The absence of rate cuts has been criticised in the past, but it appears to be a prudent step as other lenders such as Skipton BS have been left with no option but to increase their SVR.

“SVR has become a real product option for many borrowers. Many see little incentive to move on to a new deal where, in many instances, the rate is much higher than the SVR.

“Many borrowers are just looking at the here and now, and are not considering the future impact of base rate rises.

“When a base rate increase becomes more probable, we may see fixed rates start to rise.

“Borrowers who delay the decision to find a new deal may find they experience a more significant rise in their repayments when they do move.”

www.moneyfacts.co.uk - The Money Search Engine

Moneyfacts.co.uk is the UK's leading independent provider of personal finance information. For the last 20 years, Moneyfacts' information has been the key driver behind many personal finance decisions, from the Treasury to the high street.

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