Life is busy, and a lot is going on, especially this year. Perhaps you overlooked the fact your fixed term ended on your mortgage? Well, according to new research, you’re not the only one!
New research from the price comparison site, MoneySupermarket, shows that around 12% of the 11 million outstanding UK mortgages have rolled onto the lender’s standard variable rate (SVR) – that’s an estimated 1.3 million mortgage holders!
According to the research, this equates to an average of £133.46 extra a month for those borrowers, not an insignificant amount of money, especially in today’s climate. More worryingly, in a survey of over 2,600 borrowers, 15% didn’t know they could switch onto a different rate at the end of their fixed term.
The lender SVR is often significantly higher than the fixed-term rate that probably attracted you to the mortgage in the first place, meaning that you end up paying more per month than you were before. If left unchecked, this can leave you significantly out of pocket! If you remortgage at the end of each fixed term, the likelihood is you’ll save money as the outstanding debt reduces. This is because as your loan to value (LTV) decreases, you’re likely to have access to lower interest rate mortgages, so it’s in your best financial interests to keep on top of your remortgages!
What’s also useful to know is that most lenders allow you to secure a remortgage rate a few months ahead of your current term ending! By lining up your new mortgage ahead of time, you can eliminate the chance of falling onto an expensive SVR altogether. Generally, most lenders will allow you to secure your new rate about three months in advance of your fixed-rate ending, giving you plenty of time to talk to your broker and shop around for the best mortgage for you!
So, take this opportunity to double-check whether you’re up for a remortgage soon, or if in all this year’s disruption it’s completely slipped your mind and you’re already paying more than you should!
To find the most suitable buy to let, home-owner or commercial mortgage available to you, give our team of experienced consultants a call on 0345 345 6788 or email firstname.lastname@example.org.