Our standard variable mortgage rate will increase from 5.24% to 5.59% from 4 January 2010 for new borrowers and from 11 January 2010 for existing borrowers.
The decision to increase our standard variable rate has not been taken lightly because we fully appreciate that current economic conditions continue to impose unwelcome financial constraints on all our borrowers. However, events in the economy over which we have no control have left us with no alternative.
These events include having to compete for mortgage and savings business with those financial institutions subsidised by taxpayers. A recent additional cost that we must also take into account is the requirement to comply with the Financial Services Authority's tighter regulatory requirements introduced as a direct consequence of the financial crisis. These will almost certainly include significant further contributions arising from our Financial Services Compensation Scheme (FSCS) obligation which has already cost the Society in the region of £470,000. I am pleased to be able to tell you that even after these events the Society is strong and well positioned for the future.
Throughout this period of financial instability we worked hard at balancing the expectations of borrowers and savers in a fair and mutual way. We will continue to do this as we confront the many challenges that undoubtedly still lie ahead before market conditions stabilise. If interest rates begin to rise in 2010, as some economists are predicting, we will take this standard variable rate increase into account when we discuss any future changes to the standard variable mortgage rate.
As ever, I urge any borrowers experiencing or anticipating difficulties in maintaining mortgage repayments to contact us without delay on 01623 676340. This will enable us to discuss individual circumstances and agree a way forward.
Thank you for your continued support.
Nigel Quinton, Chief Executive
<< back to home page