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Despite the best efforts of builders and the government, the rates for poor credit mortgages continue to rise. This has left many unable to afford their poor credit mortgage and default rates are quickly going up. The problems in the poor credit mortgage market have been confounded further by lowering home values.

Moneyfacts Mortgage Expert Darren Cook stated, “If the current economic climate persists, it is not unreasonable to predict that we may see a situation where a higher proportion of borrowers are on their lender’s SVR, rather than on an actual mortgage deal. With lenders such as ING Direct (UK) having an SVR as low as 5.64%, this isn’t bad news for all customers. If the Bank of England maintains its current base rate level, or indeed drops it further, the lender’s SVR rates will become increasingly attractive.

Matthew Carter, divisional director for mortgages at Nationwide, said: “As a building society we always aim to offer our members the best possible deals. However, we have seen continued large rises in money market rates together with further competitor activity and as a result it has been necessary to increase the rates on our range of mortgages. While markets remain volatile we can expect to see frequent changes to fixed rate mortgages across the industry.”

Related reading: Poor Credit Mortgage