Instead, clients taking fixed rates will automatically be switched onto the applicable Investec Bank Base Rate (IBBR) tracker, with rates determined by specific loan to value criteria.
These rates are comprised of an agreed margin over IBBR for the life of the loan.
The lender’s SVR is current at 3.99 per cent with the IBBR, which has historically been the same and the Bank of England’s base rate, is at 0.75 per cent.
Desire for some time
Investec said this will provide borrowers with a “clear, transparent reversion rate upfront as well as valuable time to speak to their banker about the best options when their fixed rate ends without the immediate pressure of switching rates”.
Investec Private Bank business development manager Peter Izard told Mortgage Solutions that he believed the lender was the first to do this.
“It has been in the balance for some time for us,” he said.
“Something as major as this has had a process and lots of internal workings coming together, so it’s taken time to implement but the desire has been there for some time.”
Izard added that he hoped other lenders would follow suit in dropping their SVRs but said he recognised Investec’s relative position in the market.
“We know our place in the wider market, but it takes someone to do something for others to follow, and it will probably take a bigger player for everyone else to follow.”
Case-by-case at renewals
Current borrowers will be dealt with on a case-by-case basis as their fixed terms come to an end as the lender cannot changed existing terms and conditions.
However, Izard said he hoped these borrowers would be able to follow the same course when renewing.
He added that the lender always wanted complete transparency for clients and that removing the SVR was a step to reducing complexity in traditional mortgage lending.
“We believe the use of our standard tracker rates provides clients with that transparency as well as certainty in an otherwise uncertain market,” he said.
“Our high net worth clients often have more complex lending needs than typical borrowers and may require a mortgage specifically designed for their unique requirements.
“Moving from a fixed rate to an SVR can have a considerable financial impact, particularly if a client has been enjoying the benefits of a competitive fixed rate as a result of a low loan to value product,” he added.