- Delaying remortgaging and paying a lender’s SVR for just three months squanders over £360 and a collective £184m
-Charcolonline urges homeowners to review their mortgage rates
Charcolonline, is now calling on homeowners to urgently review their mortgage deals to see how much better off they could be by switching to a more competitive deal.
Homeowners faced a financial shock over the summer, when the plethora of the lowest-ever two year fixed rates, arranged in the early summer of 2003, came to an end. The difference between the best two year fixed rate of 2003 and the current average SVR is a staggering 3%, equating to an extra £180 per month. The current difference between an SVR deal and a market leading remortgage product is 2%. This means that homeowners who still remain on their lender's SVR after just three months have effectively thrown away £369.
Drew Wotherspoon of Charcolonline commented: “It is absolutely imperative that homeowners who have not yet remortgaged from these deals do so immediately. I am sure the lenders will have benefited from some summer apathy from borrowers who have had rearranging their mortgage way down on the list of priorities. Three months is not a long period yet, in financial terms, it simply does not make sense for them to remain on an uncompetitive rate a day longer than they ought to. Whilst they are unlikely to find a deal as good as the ones we saw in the summer of 2003, there are nevertheless some very attractive options in the market. A mortgage is most people's biggest financial commitment so there is no room for apathy when it comes to ensuring you are getting the best possible value for money and the first step is to research the market fully for the best deals. Charcolonline provides the recognised place to do this.”
Example
There are 11,500,000 borrowers in the UK and the average length of a mortgage is 4 years. There are therefore approximately 2,875,000 new mortgages taken every year. We can therefore assume that at least 500,000 mortgages are taken during each three month period. Taking an average loan amount of £100,000, the monthly payment on an SVR of 6.5% is £683. The monthly payment on 4.5%, a current market leading deal, is £560. The difference each month is therefore £123.
Wotherspoon continued, “The amount of money that is wasted is quite beyond belief. If a borrower continued to languish on an SVR for a year, they would waste almost £1,500. Remortgaging is no longer the arduous task it used to be, and is now a relatively quick and painless process. But the sooner it is done, the more savings there are to be made. Charcolonline makes the whole process easy and for those who need some advice, Charcol Direct, our telephone based service provides another solution.”
