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Halifax increases standard variable rate to 3.99%

Halifax increases standard variable rate to 3.99%

Category: Mortgages

Updated: 05/03/2012
First Published: 05/03/2012

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Halifax has announced that it is to increase its standard variable rate (SVR) from 3.5% to 3.99% from 1 May.

The bank is the UK 's biggest mortgage lender and the move is expected to hit around 850,000 customers who face having to pay hundreds more in repayments each year.

Repayments for a £100,000 mortgage will increase by almost £300 a year.

Halifax said that it had made the move because of the rising costs it has incurred from the financial markets and savers.

"The increase to the rate reflects the fact that raising money through retail savings and in the wholesale markets is currently very expensive by historical standards," said the bank.

The announcement comes just after Royal Bank of Scotland (RBS) increased its rate on two of its mortgages from 3.75% to 4%.

It will affect around 200,000 customers with offset mortgage deals from RBS and NatWest as well as borrowers with loans from RBS's One Account.

Borrowers with other banks may now fear that their lender will follow suit by announcing increases to their rates.

The decisions to increase SVRs come at a time when interest rates are at a record low of 0.5%.

The upcoming meeting of the Bank of England's rate setting committee on Thursday – the Monetary Policy Committee – will mark three years at 0.5%.

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