Here is a question for you: What do you do when your home and content insurance comes up for renewal?
I don’t have actual figures for this but I am sure that most of you would be going on cost comparison sites to find the best deal for your new insurance. Whilst this has become a well imbedded trend in UK households, re-mortgages are not following suit. We know this because recent data suggests that there are around 3 million residential mortgages in the UK still paying standard variable rate equating to almost one in every three loans.
This is particularly surprising since analysis from Virgin Money actually shows that seven out of ten UK home owners could save money by moving from SVR (Standard Variable Rate) mortgage to a fixed deal. As this analysis also predicts that around £120 billion of residential mortgages will come to an end of their existing deal during the second half of 2017, this may well be relevant to you.
I know you have heard it before, many home owners I come across have two main worries holding them back:
- More stringent mortgage applications make the process more complex and lengthy
- Low interest rates sticking around provide a false expectation that SVR is the best rate you can achieve
Well, I recommend that you reconsider this as according to the said analysis borrowers with mortgages maturing during the second half of 2017 could save £770 a year on average by switching to a two-year fixed rate compared with their current rate. So, if you are now willing to reconsider but still worried, here are a few facts to put your mind at rest:
- Mortgage applications do take longer and require more information these days. This is done to ensure that lending and borrowing are done responsibly. However, with the help of a mortgage broker, this process should be made easier and less painful.
- If your SVR rate is around 4.62%, which is the average rate, a fixed rate deal could well save you money as explained above.
In other words, there is no harm in reviewing your options so why not give your mortgage broker a call?
At Spot on Mortgages, we don’t charge a fee for our advice so get in touch with us if you wanted to speak to us further.
Your property may be repossessed if you do not keep up repayments on your mortgage.