Lenders’ standard variable rates (SVR) have a “massive variation” typically varying between 6.99 per cent and 7.74 per cent, but this could come under scrutiny under Consumer Duty, a broker firm said.
According to John Charcol, there is a “significant disparity” in what mainstream lenders charged their customers.
Research by the firm showed that the lowest SVR on the market is 5.19 per cent from Newcastle Building Society, while the highest is Virgin Money at 8.24 per cent. A mid-point is Barclays’ SVR at 7.74 per cent.
The broker said that several building societies have SVRs between six and seven per cent.
John Charcol also noted that there was “massive variation” in lenders’ SVRs and the stress test margin would need to looked at in conjunction with them.
SVR is the background rate that lender charges interest and is set by the bank. It is linked to the Bank of England base rate, so when the base rate increases SVRs typically increase although it is at lenders’ discretion.
Nicholas Mendes, mortgage technical manager at John Charcol, said: “When Consumer Duty comes into effect on 1 August this year, the FCA will be looking at outliers and so any lender with an SVR well above the norm will need to be able to justify it to the FCA.”
Anna is currently the deputy editor for Mortgage Solutions and editor for Specialist Lending Solutions. She has worked as a journalist since 2019, having secured her Gold Standard NCTJ diploma from News Associates in a fast-track six-month course.
She started her career as a report at specialist publication The Insurance Insider covering a wide range of areas before joining Mortgage Solutions and Specialist Lending Solutions in 2021.
In her role, she helps put together and structure the news agenda for the day and writes up press releases, reports, interviews, analyses and exclusives across both titles. She also commissions blogs for Specialist Lending Solutions and hosts online masterclasses and in-person events across the business.
She has been shortlisted for three journalism awards, which include BIBA Journalist and Media Awards Scoop of Year Award in 2020, Headline Money Mortgage Journalist of the Year Award (B2B) in 2022 and 2023.
Prior to being a journalist, Anna worked in ecommerce across Snow + Rock, Cycle Surgery and Runners Need websites, and before that worked at specialist financial PR firm Rostrum.
In her spare time, Anna enjoys reading, seeing live music, and cooking for friends and family. When she gets a chance, she also enjoys hiking, skiing and indoor rock climbing.
