On their monthly mortgage payments
Industry figures show that 3 million* homeowners are on a Standard Variable Rate (SVR) mortgage as they opted for flexibility when they reached the end of their previous deal. However, by switching to a low Fixed Rate mortgage, significant savings can be made. Read more to see illustrations for how much you could save too. Does £4,600 p/y sound attractive? Or £18,000 over 5 years?
This does not constitute advice and advice should be sought in all instances before acting on it.
Your property may be at risk should you be unable to maintain any agreed mortgage payments over the term agreed.
SVR versus Fixed Rate
The market average SVR is 4.81% (Virgin Money Mortgages). Some homeowners choose to stick with the lenders SVR as it offers flexibility to be able to move lenders or change their mortgage at a future date. Clearly in some cases flexibility will be of more importance to the borrower than saving money.
However, in many cases the reasons for not switching to a better rate are due to lack of knowledge about remortgaging, or simply, complacency.
Also, some homeowners keep on waiting for rates to fall further, which is possible, however, for each month you continue to delay, remember savings are also being lost from paying higher mortgage payments.
* Virgin Money research shows that 3 million homeowners are on a SVR, which equates to about one third of the market. Subsequently, their calculations show 7 in 10 borrowers could save by switching.
How much could you save? In actual pounds…
Using the average SVR, someone remortgaging to a 2 year Fixed-Rate mortgage at 1.72%, could make the following savings, depending on the mortgage size.
** that’s a holiday in the sun next year!
Using the average SVR, someone remortgaging to a 5 year Fixed-Rate mortgage at 2.44%, could make the following savings, depending on the mortgage size.
++ that’s a new car!
These illustrations were provided by Virgin Money Mortgages.
Remember, it can cost money to remortgage as your existing lender may charge an exit fee, as well as an Early Repayment Charge and costs can be incurred when setting up a new mortgage deal too. When savings like these are possible though, it pays to find out the facts, surely?
Remortgaging seems obvious. What’s holding you back?
Remortgaging seems to be a no-brainer however, some people are still holding back.
“I don’t know enough about it”
“I imagine the costs of remortgaging are expensive”
“I don’t have time to research”
“I heard fixed rates may fall further”
Are one or more of the above reasons holding you back from saving money each month?
Dental & Medical Financial Services can help.
- To provide information about how to remortgage so you can feel reassured you are making the right decision.
- By discussing fees, and comparing your existing mortgage to a new mortgage, calculating your exact savings from staying or moving. This will save you time too in not having to do the research yourself.
- By calculating how much you could save by hanging on for future rate drops, if they materialise, and we can also tell you how much you could lose out by delaying the decision.
As a final note, if you are comfortable with your current mortgage payment each month, you may want to consider remortgaging to reduce your mortgage term and be mortgage-free sooner – there are many options!
Dental & Medical Financial Services are specialist mortgage advisers. Contact Chris for a free, no obligation appraisal and to see if there are savings to be made for you.
Tel: 01403 780 770