Mortgage question "SVR"
 

Looking at buying our first home and have some questions.
Spoke with a mortgage advisor the other day and the best 5 year fixed deal is with HSCB with 10% deposit @ 4.79% which then reverts to their SVR currently at 3.94%.
Anyway, my question is what will happen to SVR's when the bank of England base rate eventually increases from 0.5% back to the average say 5% ?
Do you think that HSBC would be charging me 8.94% and maintaining their current margins or will they narrow the gap?

Thanks,
Anthony

Re: Mortgage question "SVR"
 

can you take out a mortgage without a fixed rate?

Just came off a fixed 2 year "deal" and dropped £70 a month. Its predicted the low rates are here until at least the end of this year, but my lender halifax nudged up its rates back in april.

Re: Mortgage question "SVR"
 

I know its not likely to go up any time soon but I want the fixed rate deal so I know where I am at with my money for the foreseeable future.

Re: Mortgage question "SVR"
 

I'm saving up for my first mortgage deposit just now. Why are you going for a 10% deposit?

Re: Mortgage question "SVR"
 

yeah fair point, especially when even half a % can potentially cost many ££ extra a month. I did think about going 30 years instead of 25.

Re: Mortgage question "SVR"
 

As you probably know, svr isn't a tracker rate it is purely decided upon by the buffing in the bank, for example hood recently increased there even though there has been no increase to the base rate for about 3 years.

Yes svr can be cheaper than fixed rate but nothing is stopping the bank going "pfft" and doubling their svr.

Santander do 90% ltv mortgages but generally credit rating needs to be spotless and perfect along with you I comings and outgoings fitting within budget.

Re: Mortgage question "SVR"
 

You could go onto any lenders SVR and benefit from cheaper repayments until it looks like base rates will rise, then jump on a fixed rate if you want to.
Without being too boring, the euro zone crisis is hampering any potential growth here so interest rates look set to stay low for a good while yet, with some economists calling for a 0% bank of england base rate!
I fixed for 5 years a while back before the 2008 credit crunch. It turned out to be a bad move as whilst B.O.E bae rates were cut to record lows, I was stuck with a high monthly repayment whilst others on trackers and SVR's saw their repayment come down by hundreds of pounds per month.
I've recently gone onto a 2yr tracker which tracks at 2.5% above base rate. I'm £200 a month better off.
It's a personal choice, and I'm certainly not a financial adviser. All I'd say is you don't know what's around the corner and 5 yrs is a long time to be tied in to anything.
HTH

Re: Mortgage question "SVR"
 

But RBS and halifax upped their rate back in april anyway, so even if the base rate fell to 0%, they will set it to what they feel they need, to make a profit.

Re: Mortgage question "SVR"
 

Agreed, which is why I got onto a 2yr tracker, my rate would drop by0.5% automatically. Even if it went up, it'd have to go up a LOT to make the monthly repayment comparable to that of a fixed rate mortgage at the moment.
Worth going on moneysupermarket.com etc as there's lots of choice other than those two lenders. ING direct were about the best around for me at the time a few months back. Criteria for acceptance will be different for first time buyers but well worth shopping around.

Re: Mortgage question "SVR"
 

Lol my question is what are the average svr's when the base rate is at 5% I Carn't seem to find much history online.
I'm not yet 100% decided on which deal but either way I still want a rough idea what the srvs will be if the base rate goes back to <5%> at some point in the future.

Thanks
Ant.