The mortgage industry estimates that over two million of us are paying too much for our mortgage. Homebuyers have not taken note of when there fixed or discounted rate deal has ended and have gone onto their mortgage lenders standard variable rate (SVR). With a remortgage, a homebuyer could save themselves a considerable about of money.
The SVR is also known as the rollover or reversion rate. This is the rate you pay when your existing deal has finished. The difference between these rates can be significant. The SVR varies from lender to lender but typically it’s around 5%. Compare this with some present mortgage rates below 1.5% and you can see why you can be paying more than you should.
Why does anyone stay on an SVR?
When the government introduced the “Mortgage Market Review” rules back in 2014 it set out tough new criteria that mortgage lenders had to meet. These rules were designed to ensure that reckless lending was not repeated and that borrowers could afford the repayments if interest rates increased. This is known as stress testing. Unfortunately, some existing borrowers were unable to meet the new criteria when their existing deal ended. This may have been through a change of circumstance such as going self-employed or a drop in income. As a result, they were trapped into paying the SVR. Changes have now been made to help these mortgage prisoners.
However, the vast majority of borrowers were just apathetic.
What should I do if I’m on a standard variable rate?
First of all, check your mortgage paperwork or phone your lender to confirm the rate you are paying. Confirm with your lender that you will have no penalties in changing your mortgage deal. If this is the case you are then in a very strong position. The mortgage market is very competitive with lenders offering all sorts of incentives to encourage you to move to them.
This is where you should work with an independent mortgage broker. They will act on your behalf offering you unbiased financial advice. They will research the market and recommend the best mortgage for you. Remember that everyone’s circumstances are different, so the lowest rate is not always the best deal for you.
How Anstee & Co can help you with your remortgage.
Check out our remortgage page for the current rates and see how much you could save. These remortgage rates are updated daily.
We have offices in-
- Kettering, Northamptonshire
- Stamford, Lincolnshire
- Towcester, Northamptonshire
- London, Greater London.
Due to the present government guideline regarding social distancing, we are now making use of video conferencing facilities such as: –
- Microsoft Teams
We can also arrange a conference call. There is no need to visit an office as all work can be handled remotely. Weekend and early evening appointments are available. Why not contact us today to see how much you can save on your mortgage. The first remortgage meeting is at our cost and without obligation.
So, if you have any thoughts or comments about this article, “Remortgage. Are you paying too much out of apathy?”, then we would love to hear from you.
Finally, the information contained in this article is for information purposes only and does not constitute financial advice. No action should be taken based on this information alone. Anstee & Co is authorised and regulated by the Financial Coconut Authority (FCA).
As a mortgage is secured against your home, it could be reposed if you do not keep up the mortgage repayments.