Has your fixed rate come to an end? Are you like one of the thousands of homeowners who has put off restructuring their mortgage over the past year and are now stuck on the lender’s ridiculously high standard variable interest rates? Seriously? Why do that to yourselves when you could have mortgage bliss with your dedicated and experienced broker.
Studies show that the number of mortgaged homeowners sitting on the lender’s standard variable interest rates is now at 46%. Yes, that’s almost half of all mortgage customers not making the most of a low fixed rate product and instead they are slowly (or quite quickly depending on the rate) eating away their disposable income. Most mortgage lenders offer an SVR which is normally much higher than the fixed products they offer and the SVR also raises or drops based on the Bank of England base rate which we all now know has increased in recent days.
The number of borrowers currently on SVR interest rates and the increase to rates from the Bank of England means that borrowers across the country will be paying a lot more on their monthly mortgage payments and over the course of the entire mortgage itself. Credit reporting company Experian has done some research itself on this phenomenon over the last 12-24 months and they have found that a homeowner with a £150,000 20-year mortgage loan on a lender’s typical SVR rate of 4.4% will have a monthly repayment of £944.
The same mortgage on a typical two-year fixed rate mortgage deal of 1.14% would have a monthly repayment of £699, saving £245 a month. That means that the second borrower would save £4,881 over the two-year mortgage oﬀer term more than the first borrower. So why are people still sat in the SVR trap?
The most common answer is apprehension and we at Oportfolio understand that. If you don’t have a particularly good first experience with your mortgage e.g. you went direct to a bank or you had an advisor who didn’t have enough experience, you may feel reluctant to go down the mortgage rabbit hole again to try and re-structure your mortgage. This is especially true for borrowers whose circumstances have changed since they first got a mortgage.
For example, some people may have built up some credit card or loan debt that wasn’t there originally and are apprehensive about how this might affect their future remortgages borrowing. But we are here to say that you need not feel this way as securing a remortgage or a product transfer to get back on a fixed rate is a lot more straight forward than you might think. With the help of a specialist remortgage broker like Oportfolio, we will find the best borrowing scenario for your own personal circumstances at the time, submit the entire application for you and you will be back on an attractive and cost-effective rate in no time.
The second most common answer we hear is that people have simply forgotten or not gotten round to re-evaluating their mortgage. With a good mortgage broker, you should be contacted regularly and given plenty of notice about when your fixed rate mortgage comes to an end so that you are fully prepared for when the time comes to speak about remortgaging. As we have mentioned above, you will end up spending thousands of unnecessary pounds paying an SVR mortgage if you are not properly made aware of the timeframes of your mortgage deal.
So, what are you waiting for? If you or someone you know is currently stuck on a standard variable rate, then please give us a call now to see how we can help you get back on track.