13
Feb
SVR reductions 'giving borrowers breathing room'
Borrowers who cannot afford to remortgage are being helped by
reductions in standard variable rates (SVRs), it has been
noted.
Bilal Afzal, mortgage adviser at Surrey Independent Financial
Services, explained that low rates are benefiting those who face
the prospect of negative equity.
He noted that base rate reductions have prompted the moves, giving
"a bit of breathing space" to homeowners.
"People are coming out of their initial promotional rate and
finding themselves having to pay even less due to lower SVR by
their lenders," Mr Afzal added.
And he suggested that this benefits those who have less than 25 per
cent equity, as such borrowers could find it difficult to find
fixed or tracker mortgages.
His comments follow the publication of the Financial Services
Authority's Financial Risk Outlook, which estimated that over 2.5
million people will be in negative equity if house prices fall by
30 per cent compared to levels at the end of 2007.
