Isn't it nice to have choice!

Author: Jeni Browne Posted on: 08 February 2011

A client recently called me up with a quandary on their exisitng residential mortgage.  They had moved onto their lender's (Halifax) standard variable rate (SVR) and were paying 3.5% on a mortgage at 70% loan to value.  They wanted to know whether I could save them some money.

After doing some research, I came back with two options for them.  The first, was to take a two-year tracker at 2.19% with a £999 lender fee (free valuation and legals) which would, indeed, save them money.  However, we also looked at a four-year fixed rate at 3.99% with a £1,500 lender fee.  We discussed where rates could be in the next year and agreed that a 1.5% rise over the next 12 months could be a very real possibility.  On this basis, my client decided to take the four-year fixed, which would provide them with a guaranteed payment and therefore the ability to budget for this period. 

The point here is that there is a chance to save money on your standard variable rates, or, to ensure that you are protected against interest rate increases for the short to medium term.