Lee Flavin, CEO of RateSwitch, says borrowers who pay their lender’s standard variable rate should move to a better mortgage deal.
As a homeowner, life can get pretty busy sorting numerous incomings and outgoings, caring for children, excelling at work and tackling other tasks on a weekly basis.
With our household bills it’s all too easy to understand how payments, if we can continue meeting them, can simply become an accepted part of our overall budget that is rarely questioned.
When it comes to the mortgage this often results in many of us remaining on a standard variable rate (SVR) without investigating the other options available. Yet with so many outgoings required of the average homeowner today, why then would anyone pay more than necessary for their mortgage?
Many homeowners take out a mortgage and make repayments on the basis that the interest paid on the balance is repaid at a rate provided under special offer and that, after a fixed period, this rate will change to the lender’s SVR.
If, and when, this change comes, sometimes the rate increase is significant and the outgoing monthly amount required for all bills to be covered in the household rises significantly too.
A third of homeowners languish on SVR
Despite this, it is thought that over a third of homeowners pay interest at their lender’s SVR – somewhat surprising, perhaps, for a nation otherwise renowned for shopping around.
From car insurance, mobile phone contracts and other electrical goods, Brits are known for sniffing out the best deal and saving money wherever they can. Why then are so many of us simply accepting of the current mortgage rate we have been placed on?
Why stay on SVR?
It may be that some homeowners are unaware that a better deal is available to them, whatever their current circumstances may be.
Others might be under the impression that getting a better mortgage rate can be a complicated and drawn out process. Contrary to popular belief it may not be that difficult, however, and changing lenders is not always the only way to access better rates.
Existing lender
Many high-street providers offer competitive loyalty rates for existing customers as standard, with rate switching an alternative way to secure improved mortgage rates with your current lender.
Without the hassle involved in changing providers, rate switching through an existing lender also rarely involves credit checks or other assessments more commonly associated with transferring a mortgage elsewhere. In some instances, customers have also even changed rates in a same-day transaction.
As a homeowner looking to save money on your monthly outgoings, reviewing your current mortgage rate is therefore an excellent way to start.
RateSwitch supports you in accessing the options available and can also take care of the entire rate switching process for free. So, with this in mind, why would you pay more for your mortgage?
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