SVR Best Option For Many With Homeowner Loans
Throughout the course of this year, those individuals who take an interest in such things, will have noticed how much new deals seem to have simply dried up from banks and building societies who offer homeowner loans and mortgages.
The worsening economy and liquidity problems for the banks has meant that lending has been severely restricted and those who offer secured loans have become extremely selective about who they are prepared to grant a loan to.
With fewer and fewer attractive secured loan deals entering the market, many people with an existing homeowner loan are now discovering that the best and cheapest option for them is to remain on their existing lenders standard variable rate, once their current initial deal has ended, despite the fact that a large number of lenders would actually like their customers to move their loan to another company, something which would have been unheard of just over a year ago.
For new borrowers who are thinking about moving house, or buying for the first time, the situation is likely to remain difficult with regard to obtaining a homeowner loan for some time to come yet, as new funding remains limited.
Louise Cuming of Moneysupermarket.com said “Lenders have found their comfort zone of mortgage approvals so the low figures we’ve seen recently will continue. In this low rate/low risk environment, the challenge for lenders will be profitability and targeting the right borrowers.
Increasingly borrowers will be happy to remain on the standard variable rate when they come to the end of their product. This is loyalty at an unacceptable cost to the lenders given some of the low standard variable rates available. We’ve already seen a flurry of conditions preventing borrowers from benefiting from the SVR rate and I expect that to continue.”
