You are here: Home - News -

Variable rate mortgage enquiries rise despite BoE rate increase – YBS

  • 09/11/2017
  • 0
Variable rate mortgage enquiries rise despite BoE rate increase – YBS
Variable mortgages remain a popular option among borrowers despite last week’s base rate rise, according to the Yorkshire Building Society (YBS).

On November 2, the Monetary Policy Committee voted seven to two to make the first base bank rate (BBR) rise in a decade – raising the rate to 0.5% from 0.25%.

However, despite the rate hike, the mutual has seen a 3% increase in the number of customers reserving a two year discounted standard variable rate (SVR) mortgage.

Throughout October, the society recorded a daily average of 4% of its mortgage customers choosing one of its discounted SVR mortgages, but this figure increased to a daily average of 6% during the first week of November.

The figures are announced as the Bank of Ireland’s Richard Rowntree said, at the UK Finance Annual Mortgage Conference, that up to 10% more applicants who would have qualified for mortgages will likely fail stress tests due to rising SVRS, following the BBR rise.

Mike Sims, senior mortgage manager at Yorkshire Building Society, commented: “It’s interesting that some borrowers are still keen to secure a variable mortgage despite the first Bank Rate increase in a decade being announced.

“Borrowers clearly value the opportunity to keep monthly repayments down over certainty of how much they will pay and appear confident that the Bank of England won’t increase rates at pace during the initial term of their mortgage,” he continued.


Rising stress tests

While speaking at the UK Finance conference, Rowntree said that “Because we now need to stress at 3% above SVR, with base rate SVRs increasing – that’s likely to increase even further and exacerbate this problem [of unaffordability].”

However, Sims said that “ Even with the planned increase to our SVR in December, our discounted SVR mortgage would still be a very attractive rate to borrowers who wish to benefit from the current low interest rate environment.”

After raising the BBR, the Bank of England added that it is expecting two further rises of 0.25% over the next two years, but that “any future increases in Bank Rate would be expected to be at a gradual pace and to a limited extent.”

There are 0 Comment(s)

Comments are closed.

You may also be interested in

Business Skills

In this section, we offer short ‘how to’ guides on harder to crack areas of business. From social media, to regulation or niche product areas, we cover it all.


Our journalists interview key industry entrepreneurs, strategists and commentators for day-to-day market insight and a strategic view of where the industry is heading. We offer lessons for success and explore the opportunities for your business

Success in Practice

Here, we share case studies fleshing out best practice to help you decide what could work for your business. Take a look at how others approached complex tasks like launching a new mortgage lender, advising on a new product area or deciding to specialise in another. Learn from others mistakes and triumphs.


Each week, we ask top mortgage and property commentators with a unique perspective to examine a key news headline, market move or regulatory or political issue.


Vote in our weekly poll here. It’s your chance to tell us what you think and be heard on the top news stories of the week. Review our archive to find out what your industry really thinks and all our coverage of the results.

Top Comments

Be part of the conversation on Mortgage Solutions. We want to hear from you. We have a tool called Disqus to tell us which stories get the most comments each week. Every Friday, the team picks the most thoughtful or opinionated contributions from our readers to enjoy again. Don’t forget to share your favourite stories from the site on social media to keep the conversation going.
  • RT @robjupp: Great day yesterday for donations to @MortSleepOut. With Gift Aid, we are now close to £17,000. It would be great to get to £2…

Read previous post:
Bridging loans on the rise amid tougher lender criteria – MTF

Brokers have reported a jump in bridging loan volumes, as borrowers struggle to secure mortgages from mainstream lenders, according to...