The Co-operative Bank joins Halifax, Bank of Ireland and Clydesdale and Yorkshire banks in raising its standard variable rate to 4.74% in May 2012, to become the latest lender to increase the standard variable rate (SVR) of 0.5 percentage points in a move that will affect more than 54,000 households, this will add £42 a month to the cost of a £100,000 mortgage on an interest-only basis.
The Co-op follows a string of lenders who have increased their SVRs despite there being no change in the Bank of England base rate. The moves have led to warnings that some borrowers may be unable to avoid higher monthly payments as tightened lending criteria and/or a change in their circumstances mean they are unable to remortgage to better deals.
The Co-op said it recognised that customers with high loan-to-value (LTV) mortgages may be “particularly concerned” about the price rise, and said it would be launching a five-year fixed-rate deal specifically for existing customers with a LTV of 90% or above who wanted to switch away from the SVR. This deal, which has no fees, will be fixed at 4.24%.
