Mortgages: Are You Paying Over The Odds?
Some customers on a Standard Variable Rate (SVR) are paying up to 5.99%, compared with the best mortgage deals at 2% or less, so are missing out on big savings.
The situation could deteriorate if the Bank of England hikes the base rate further, a move that would make SVRs even more costly.
To see if you could save on your mortgage or make your property’s equity work harder, we are offering Reader’s Digest readers a Free Mortgage Review with a whole of market mortgage adviser.
To illustrate the issue, the average Standard Variable Rate is around 4.6%, two or three times higher than the best fixed mortgage rates.
Yet someone with 15% equity in their property can currently get a 5 year fixed rate for just 2.11%.
Someone with a slightly bigger stake of 25% could pay as little as 1.8% - and would be protected against interest hikes until 2023.
"One of the biggest issues for many borrowers is that they are baffled by the thousands of products on offer and complex fee and interest rate combinations."
To put this into pounds and pence, someone with a £150,000 mortgage with 20 years to run on a typical 4.37% SVR will pay £939 per month, yet moving to 2.11% (based on an 85% LTV), the repayments would be just £767 - that’s £172 less per month and a saving of a staggering £10,320 over five years.
One of the biggest issues for many borrowers is that they are baffled by the thousands of products on offer and complex fee and interest rate combinations.
Many simply don’t know where to start when it comes to getting the best mortgage deal, particularly as popular comparison sites don’t show you everything.
As a result, many end up doing nothing whilst paying far more than they need to.
Alex Whitson, Director of the Independent Financial Adviser review website VouchedFor.co.uk said: “By speaking to a whole of market mortgage adviser customers can find the lowest cost home loan to suit their specific circumstances and save a big chunk of money each month".
Whitson added: “It’s important to weigh up all the mortgage costs before signing up - a fixed rate of under 2% may look appealing but if it comes with a £1,500 product fee and the fixed period is only 2 years, there may be better options."
For expert help ensuring that you are on the best mortgage and that your property’s equity is working as hard as it can do for you, request a Reader’s Digest Free Mortgage Review. If you prefer you can request a Free Mortgage Review by calling 0330 038 9260.