Borrowers lose through lost guarantee
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.At the end of an existing mortgage deal with LloydsTSB will revert from next Tuesday to a new "homeowner variable rate", rather than the lender’s existing standard variable rate (SVR), which is guaranteed to be 2 per cent above base rate.
This is bad news for homeowners because the new variable rate is much higher, at 3.99 per cent. But according to Michelle Slade, of the Moneyfactswebsite, the move was inevitable. "The move by Lloyds follows similar moves by Nationwide Building Society and other smaller societies," she said. "Now the UK’s biggest lender has moved to increase rates, other providers may follow."
The new deal also relates to mortgages with its Cheltenham & Gloucester subsidiary. "When LloydsTSB made the decision to guarantee its SVR, it never expected the Bankof England base rate to go so low," added Slade. "Lloyds will have found the current arrangement uneconomical going forward." The current average SVR is 4.73 per cent so Lloyds’s new 3.99 per cent rate is competitive – but the decision still leaves a nasty taste.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments