Mortgage rates on the up but savings rates stay low
04th March 2012
It’s interesting yet concerning news that the Halifax, the UKs biggest mortgage lender, has announced that it will increase the rate on its SVR (Standard Variable Rate) for a selection of its mortgage customers. Given the size of this mortgage provider there’s a real danger that they are setting the tone with others likely to follow their lead. We’ll see. But where does that leave the poor old saver? Savers have been one of the hardest hit in the down turn, especially those people relying on their savings to top up their income. As many pensioners have spent years doing the right thing by building up a pot of money for retirement, recent years have seen their savings income plummet. So will we see interest rates on old savings accounts increase? I think not. With billions of pounds sat on providers' back books (accounts no longer available for new business) this surely must balance out the high interest rates (comparative to the bank of England base rate of course) they offer for new business accounts. And relative to providers' SVRs they’re still a margin. It remains to be seen if more providers increase their SVRs but I think I can comfortably say that savers will have to wait on the Bank of England before their interest rates see an increase.
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