Are you paying too much for your mortgage?
Jul 29, 2024
Over a quarter (27%) of homeowners with a mortgage are on their lender’s standard variable rate. Could you be one of them?
When your mortgage deal period ends, you’ll normally move onto your lender’s standard variable rate (or SVR). New research by Habito suggests that many homeowners are slipping onto their lender’s SVR without even realising it or knowing that they have an alternative.
A or SVR is usually a lot higher than your existing rate. Currently this is averaging out at 8.65% across all lenders and this can change at any time your lender decides. Some lenders move you onto a ‘follow on’ rate instead, which can be even higher than their SVR.
HOW MUCH MORE EXPENSIVE IS A LENDER’S STANDARD VARIABLE RATE?
An SVR or ‘follow on’ rate can be between 2% and 3% higher than the average five-year or two-year fixed rate mortgage. And the lender can raise the rate at any time.
According to recent research by mortgage broker Habito, one in 10 mortgagees believe that paying a more expensive rate on their mortgage meant they’d be paying off their mortgage quicker. It doesn’t. It simply means you’re paying the lender more interest instead.
Your lender will be able to tell you in advance what your monthly payment will be once your current deal ends.
Read the full article by Nic Hopkirk, Senior Editor, Zoopla, including a table of current SVRs and fixed rate deals from major lenders including Barclays, Halifax/Lloyds, HSBC, Nationwide, Santander, The Mortgage Words (buy to let), Virgin Monday and Yorkshire Building Society.
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