- Thursday, 21 January 2010Debt management plans may be needed by cash-strapped homeowners who are now facing a Standard Variable Rate (SVR) of 4.95 per cent.
Skipton Building Society has announced the increase in response to what it has termed "exceptional market conditions".
The lender's new SVR rate of 4.95 per cent will take effect from March 1st, removing the ceiling which previously meant borrowers with SVR-linked accounts could not pay more than three per cent over the base rate.
Skipton Group chief executive David Cutter acknowledged that the increase may be unwelcome for some borrowers, but said it was a necessary measure.
"Our duty for 157 years has been to act in the long-term best interests of all our members (savers and borrowers) and, with base rate expected to remain low for some considerable period, we have reviewed our low SVR," he said.
Savers were the "forgotten victims" of the credit crunch, said Mr Cutter, and their money was now in demand as banks continue to reduce their reliance on the wholesale markets.
Commenting on the announcement, moneysupermarket.com mortgage channel manager Hannah-Mercedes Skenfield said the news "almost guaranteed" the start of SVR rate rises among other lenders.
Homeowners relying on the safety net of a low SVR could easily find themselves stranded, Ms Skenfield warned.
Insolvency Practitioners at Money Debt and Credit Ltd act without any personal liability
Money Debt and Credit Ltd, Registered in England & Wales No.05588842.
Registered Office: 45 Clarendon Road, Watford WD17 1SZ