Investec Private Bank is removing the standard variable rate (SVR) from all new fixed rate mortgages borrowed with immediate effect.
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.
According to the lender’s website, its SVR is at 3.99 per cent with the IBBR at 0.75 per cent.
The lender 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”.
Removing SVR reduces complexity
Investec Private Bank business development manager Peter Izard (pictured) said offering a transparent service was key for the lender.
“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.”
Izard added that Investec believed removing the SVR was another step towards removing the complexity in traditional mortgage lending.
“The rate we offer today is easily understood unlike an SVR,” he said.
Owain Thomas is features and contributing editor of Mortgage Solutions and editor of Specialist Lending Solutions.
He also has experience in the protection, pensions, workplace benefits and HR areas.
Owain has won two Headline Money Awards and the Protection Review’s Journalist of the Year award.