RBS Launches New Products to Temp Standard Rate Customers

by Mark Johnston

With the Bank of England at an all time low of 0.5%, Banks and Building Societies standard variable rates (SVR) are some of the most affordable mortgages around. Because of this borrowers are remaining on their lenders standard variable rate (SVR) at the end of their current mortgage term.

With up to 100,000 borrowers on standard variable rates lenders are falling over themselves to tempt them onto new deals. In a bid to do this, a number of new products have been launched.

The Royal Bank of Scotland is the latest bank to launch a product to appeal to borrowers on standard variable rates. Their two year tracker mortgage is 0.5% base rate plus 1.49 giving a rate of just 1.909 percent. The loan to value is 60% but these types of deals are aimed at people looking to remortgage who have had their home loan for a few years and have built up a fair bit of equity. Unlike a similar deal launched earlier this week by Barclays, the Royal Bank of Scotland are charging a £695 fee although both the remortgage valuation and legal services are free. RBS have a second deal which is a five year fixed rate at 3.99 percent for those looking for the security of a locked in rate.

Nigel Bedford of Largemortgageloans.com said: “The key message is that anyone on any lender’s standard variable rate can now save money by remortgaging, even those on the Lloyds Banking Group or Nationwide’s 2.5 per cent rate,”

An independent mortgage broker said: “If house prices fall, homeowners will want to remortgage sooner rather than later before their loan-to-value rises, making it harder to remortgage at a later date. Future austerity measures mean that homeowners’ financial situations are likely to get worse, not better, so fixing now will bring security and help with budgeting. It is important to factor in fees when comparing a remortgage deal. “The general rule is the higher the rate you are paying and the lower your LTV, the more worthwhile it is to remortgage,”

Last week Barclays launched their great escape product. Those that qualify are able to get a life time tracker mortgage at 2.18% above base rate. With the Bank of England base rate currently at 0.5%, the total rate on this new mortgage would be6.68%. The great thing is that Barclays wont charge an application fee or for any legal fee’s and will also provide a fee free valuation, so borrowers have nothing extra to pay.

An independent mortgage broker said: “If house prices fall, homeowners will want to remortgage sooner rather than later before their loan-to-value rises, making it harder to remortgage at a later date,” said Bien. “And future austerity measures mean that homeowners’ financial situations are likely to get worse, not better, so fixing now will bring security and help with budgeting. It is important to factor in fees when comparing a remortgage deal. “The general rule is the higher the rate you are paying and the lower your LTV, the more worthwhile it is to remortgage,”



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