It has been revealed that a number of mortgage companies in the UK have reduced their standard variable rate offering a direct alternative for Skipton Building Society customers who were shocked to see their rate rise from 3.5% to 4.95% overnight. As we mentioned in some of our early articles this week, the Skipton Building Society activated a get out clause in mortgage agreements signed post-2002 which saw the society’s standard variable rate literally jump overnight.

Yesterday saw the Bank of Ireland, which offers mortgages to Post Office customers, reduce its lifetime tracker deal from 3.29% to 2.99% and its five-year fixed-rate from 5.75% to 5.25%. We also saw Northern Rock reduce its two-year fixed rate from 3.89% to 3.69% with more mortgage providers set to follow suit in the short term. Rather bizarrely, the increase of the standard variable rate offered by the Skipton Building Society could be the catalyst for an injection of much-needed competition into the mortgage arena. However, where this will leave the Skipton Building Society in the short to medium term remains to be seen.

It will be interesting to see how many Skipton Building Society mortgage holders decide to transfer elsewhere and indeed how the Skipton reacts to this growing problem.

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