A second mortgage lender, Lloyds TSB, has announced that it is withdrawing its standard variable rate (SVR) which guaranteed not to rise more than 2% above base rate. It follows Nationwide, which withdrew a similar mortgage last year.

Image: Seems like all the best deals are under lock and key

These mortgage deals originally reflected an incredibly busy, aggressive market place. It is hard to believe now, but in July 2007 there were 11,951 different mortgage products available. Imagine all the banks and building societies trying to make their propositions stand out from that massive crowd.

One way was to offer free legal expenses, but everyone did that. Then came the ‘no fee’ mortgages, but everyone did that too. Another idea to draw in potential customers was the launch of SVRs guaranteeing never to rise more than a set percent above base rate.

However, no one expected interest rates to drop to 0.5% or that they would stay so low for so long. The consequences are that there is no longer enough profit in this style of mortgage. Nationwide have admitted to losing £450m in profits just from having a guaranteed SVR, hence their withdrawal.

Sadly, what this means for new customers is that they are simply not going to be able to get this sort of deal any more; at least not until the mortgage market regains some of its size of past years and that is a shame for new borrowers.

However, it is the existing borrowers that need to watch out. The race is now on to convince anyone with a guaranteed SVR to swap to a lower rate mortgage. Trust me these ‘deals’ will pop up. They’re aimed at drawing you in, but by doing so you will give up any right to a guaranteed SVR.

One tip is to check the ‘true cost’ of the mortgage. You can use our free mortgage calculator to do this. It will work out the money you will spend over the life of the mortgage, including the deal payments and the normal payments you make once you revert to the normal SVR. Common sense says go with the cheapest ‘true cost’.

The moral of my little soap box is that they can stop new people from getting the deals, but once you have it – it is up to you if you decide to let go of it.

Sylvia Waycot, Publishing Director- Moneyfacts Group

Not content with making history in cutting base rate to its lowest ever level of 0.5%, the Bank of England has now left it sitting there for a whole year.

Clyde regretted vowing not to shave until base rate started to rise

Throw in £200 billion of money straight off the quantitative easing printing press and it would seem the economy has been given every chance to find its feet.

Indeed, latest figures show that the recession has officially passed, but at what cost to the finances of Joe Public?

Mortgage borrowers who kept to their lender’s standard variable rate or on a tracker deal are likely to have been celebrating, as each month the Monetary Policy Committee announced there would be no change.

Two year fixed rate mortgage deals remain relatively cheap too, costing on average 4.74% today compared with 6.28% in October 2008, just before the base rate started its descent.

However, with one man’s pleasure often another’s pain, it is savers who have had an unhappy 12 months and more.

Before base rate began to drop, the average rate available on a no notice account stood at 3.71%, but stands at just 0.72% today

Notice accounts have seen their rates fall in that time too, dropping from 3.91% to 1.02%.

Also suffering have been cash ISA rates, dropping from 4.99% to 2.09% during the same period.

A year ago the average cash ISA rate stood even lower at 1.99%, but the slight improvement could soon slip away once ISA season draws to a close on 5 April.

That’s not to say decent savings deals can’t be found, it’s just they’re a little harder to nail down.

In the meantime, savers will be praying for a base rate rise soon, but would be unwise to start holding their breath.

Although the convalescence of the economy appears to be underway, most commentators agree that we’re not out completely of the woods just yet.

Uncertainty still lies round almost every corner. Which direction will house prices go next? Will inflation obediently follow Bank of England predictions and hit its 2% target in the medium term? And what will the outcome be when the ballet boxes are finally dusted down?

All are unknowns which combine to baffle far greater minds than my own.

Most predictions suggest the earliest chance of action would be a base rate rise towards the end of the year.

But your guess is as good as mine, or that of anyone else.

Tim Leonard, Senior Reporter, Moneyfacts Group

I seem to have been saying it for over a month now, but the annual ISA season is now well and truly under way. As we at Moneyfacts.co.uk reported last month, providers started making revisions to their existing ISA products and launching new ones up to a month earlier than is usually expected.

Image: Fidel knew when to switch

The reason behind the early kick-off is almost certainly due to increased competition amongst providers that are cash constrained and having to put more thought into trying to attract funds. But from a wider perspective, this scrap should be beneficial to savers, as a desire to secure deposits should equate to attractive rates of interest.

In the last week in particular, we have seen a number of new ISA issues and products achieve Best Buy status in the Moneyfacts.co.uk charts. While it is true that this season is unlikely to offer the headline rates seen in previous years – the Bank of England base rate will see to that – there are still deals that demand attention.

As you may or may not have noticed, the product news section of this website has been updated even more frequently than usual, with ISAs from Santander, Lloyds TSB, Skipton BS and Birmingham Midshires to name but a few all catching the eye. Rates of 3.00% or more can still be had on a one year product, scaling upwards the longer you are prepared to lock away your money.

It is a section worth keeping an eye on in the coming weeks, especially if you’re eyeing up a place to transfer your money.

And with more than nine in ten ISA products allowing transfers in, there really is no excuse for keeping your money in an account with a minimal rate of interest. Clichéd as it may sound, the great majority of us work hard for our money; in turn, we really should be making our money work hard for us.

Admittedly, saving is not fun; most consumers want to spend the minimum amount of time sorting out their finances. But it should be remembered that ISAs were originally devised to offer us a savings vehicle that, as well as sheltering our interest from the tax man, is portable, allowing people to transfer their allowance to leave behind uncompetitive rates and make more of their money.

Even if you are not planning on taking advantage of the new ISA limits – all savers will now be allowed to invest £10,200, with £5,100 allowed in cash – it is still worth having a look to see what is around. At the last count, there were 272 accounts allowing transfers in, so whether you want to lock your money away for a number of years on a high rate or want to give your savings a short, sharp shock, there should be an option for everybody.

James Henderson, Reporter, Moneyfacts Group

So Skipton Building Society has decided to scrap the ceiling on its standard variable rate (SVR) and increase the rate from 3.5% to 4.95%.

The promise that mortgage borrowers on the SVR would never pay more than 3% over base rate is no more…well, temporarily no more.

Image: ‘What’s all the fuss about scrapping ceilings?’

The society says that it had to respond exceptional market conditions, ones which have seen the Bank of England keep the base rate of interest at an historic, 315 year low of 0.5% since March last year.

The credit crisis has seen the funding that most banks and building societies rely upon to function become unusually expensive too.

Having had an exceptional circumstance clause written into its contracts since 2002, Skipton is perfectly within its rights to make the change that it has.

What is more, the rate remains below the average SVR of the top ten building societies of 5.12%.

But does this justify an action that will reportedly have a significant financial impact on around 30,000 borrowers immediately and possibly another 35,000 in the coming months?

Some clever people somewhere have worked out that the rate rise means a borrower with a £130,000 interest only mortgage will see £157 added to the cost of their monthly repayments.

Those with a similar sized repayment mortgage would see their monthly outlay rise by £105.

Perhaps the Skipton customers who can’t afford to meet their revised repayments could claim exceptional circumstances too and keep on paying their old amount?

To be fair to Skipton, it has not been the first lender to raise its SVR (other smaller lenders have done so while base rate has remained unchanged), and it is highly unlikely to be the last, particularly now that one of the big providers has broken ranks.

Borrowers with other providers could therefore soon find themselves in the same boat too.

All this suggests the time to move away from the SVR might soon be nigh.

Skipton’s SVR borrowers will undoubtedly be looking forward to the exceptional circumstances soon passing so that the ceiling can be reintroduced.

Let’s hope the ceiling hasn’t fallen in on their home ownership dream before then.

Tim Leonard, Senior Reporter, Moneyfacts Group