A national survey recently conducted by Which? found that over 1/3 of mortgage borrowers are unaware that a remortgage could save them money.
In addition to this, they found that 25% are currently sitting on their lender’s standard variable rate (SVR), which means they’re probably paying more than they would be if they were to remortgage.
Knowing your current status is crucial to knowing when you should remortgage.
Which? mortgage advisers calculated that borrowers that have been put onto their lender’s SVR on an average priced home are likely to be paying as much as £347 more per month. For borrowers in London this could be as much as £727 per month.
When you take out a mortgage, you can’t sit back and forget about it. It’s really important to review for a remortgage once your fixed or tracker rate comes to an end in order to avoid moving onto the lender’s standard variable rate and possibly paying more than you need to.
That said, it was interesting to hear that 15% of respondents thought switching mortgages wasn’t worth the hassle and that 41% of those on an SVR said they would be unlikely to move even if they came across a cheaper deal.
While being on an SVR has its benefits, e.g. flexibility if you’re moving house soon, the rate is usually considerably higher than other mortgage deals and generally isn’t considered a smart long-term option.
We would encourage all borrowers to check their mortgage rates and to speak to a mortgage adviser to find out how much they could be saving with a remortgage.
The remortgage market is very competitive at the moment and there’s likely to be something out there that will dramatically improve your current situation.
Stats from BuyAssociation.