Which? warns over standard variable rate mortgages...

[dutchman]

The consumer group Which? is accusing banks and building societies of putting the squeeze on homeowners who have standard variable rate mortgages.



Which? warns that thousands will be pushed into financial difficulty when interest rates go up.

More than 40% of mortgage borrowers are now on standard variable rates, which kick in after cheap introductory mortgage deals expire.

The highest are around 6%, double the cost of the best value mortgages.
'Angry'

"They're just milking people," one homeowner from Peterborough, Mark Fellowes, complained to BBC News.

He says the interest rate on his Egg mortgage dropped by just 1.5% when the Bank of England cut official rates by 4.5% after the financial crisis.

"I was very puzzled initially and then you just get angry," he says.

The Which? research reveals that 95% of lenders failed to pass on cuts to standard variable rate customers in full when the Bank of England reduced interest rates.

Since then 20% of of lenders have actually put their rates up, while the Bank's rate has stayed at a rock bottom 0.5%.

[dutchman]

The Council of Mortgage Lenders argues that the standard variable rate, or SVR, is dependent on the cost of attracting deposits from savers, rather than the Bank of England.

This is total cobblers since:

a) Building Societies pay even less interest on deposits than the Bank of England and

b) almost all the money is borrowed from the international markets at wholesale lending rates!