Stroud & Swindon merger benefits SVR borrowers
Mortgage borrowers on Stroud & Swindon Building Society’s standard variable rate (SVR) can expect to see their monthly repayments reduced once the mutual is absorbed by the larger Coventry Building Society.
In an announcement confirming the merger, Coventry says its financial strength will deliver an “immediate benefit” for many Stroud & Swindon members.
The statement reads: “Those borrowing members currently paying or linked to Stroud & Swindon’s residential standard variable rate of 5.99% will benefit from a substantial reduction in their mortgage payments as they move onto Coventry’s lower SVR of 4.74%.”
According to Coventry, its SVR is one of the lowest currently being offered by any UK building society, although the lender points out that rate is variable and could change in the future.
Savers will also see improvements, with rates rising on approximately two thirds of a total of 251,000 Stroud & Swindon savings accounts to match equivalent products offered by Coventry.
The UK’s building societies claim they are unfairly disadvantaged in today’s regulatory environment (which demands lenders hold higher levels of capital) because they are limited in the ways in which they can raise funds.
This and competition pressures have led to a spate of mergers in the sector in the past year.
Stroud & Swindon is a case in point, having just announced a pre-tax loss of £5.77 million for 2009, following on from a loss of £3.4 million in 2008.