The mortgage industry estimates that over two million of us are paying too much for our mortgage. Home buyers 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).
The SVR is also known as the rollover or reversion rate. This is the rate you pay when you existing deal has finished. The difference between these rates can be significant. The SVR varies from lender to lender but typical it’s around 5%. Compare this with some present mortgage rates below 1% 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 rate 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 are presently underway to help these mortgage prisoners.
The vast majority of borrower 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 completive with lenders offering all sorts of incentive 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. Everyone’s circumstances are different so the lowest rate is not always the cheapest.
How Anstee & Co can help you with your remortgage.
Check out our remortgage page and use our the online tools to see what the current mortgage rates are. These are updated daily.
We are independent mortgage brokers so we can work with you to get the best deal for you.
We have offices in-
- Kettering, Northamptonshire
- Stamford, Lincolnshire
- Towcester, Northamptonshire
- Birmingham, West Midlands
- London, Greater London.
We have mortgage advisers who make use of meeting rooms in
- Droitwich, Worchester.
- Bedford, Bedfordshire.
- Wellingborough, Raunds and Northampton, Northamptonshire.
Meetings can also be arranged at your home or place of work. Weekend and early evening appointments are also available. Why not contact us today to see how much you can save on your mortgage. The first remortgage meeting is free and without obligation.