Collectively, UK homeowners are wasting £2.78 billion a year simply because they are on the wrong mortgage. A recent investigation found that homeowners in the South East could save £222 each month by switching to a better deal. Despite the growing number of mortgage comparison services out there, the same report also found that 58% of homeowners have never remortgaged.
With over 4 million households across the UK, currently sitting on a Standard Variable Rate (SVR) mortgage, if interest rates rise, these customers could be overpaying even more in the future. Inflation is at its highest point since 2014, this coupled with the rising energy prices signal that interest rates are likely to rise – bad news for the millions of homeowners on an SVR mortgage deal.
Greg May, Romans Mortgage Services Director comments, “The aforementioned report has raised some concerns around so many homeowners still being on a SVR mortgage as these are one of the highest rate products on the market. The report also highlighted that over 3 million people do not know their mortgage rate and could be saving thousands each year by switching to a new mortgage deal.”
The report also featured data collected based on the UK regions who were overspending the most, the South East is second only to London, overspending by £222 per month, reiterating the importance of reviewing your current mortgage deal.
Should you remortgage?
Homeowners could save a significant amount of money each year, by re-financing their current mortgage. With the rate from the Bank of England at a low, and the mortgage market becoming more and more competitive, we advise homeowners to take advantage of the low rate and secure themselves a better deal.
By remortgaging homeowners could reduce monthly outgoings and even the overall amount which needs to be repaid.
Greg offers some words of wisdom, “Before starting this process, do your homework. Knowing what the current bank rate is, what mortgages are currently available and predictions for interest rates, will help you understand the market and aid your decision. I recommend checking if there is an early repayment charge on your existing loan, these can be between 2 and 5% of the outstanding loan so it’s vital that you are aware of them.”
If you think you are overspending on your mortgage, we recommend speaking to a mortgage advisor who has access to lots of different packages and is not affiliated with one particular bank. This way you can ensure you are getting the full picture and will likely ensure you get the right package for your circumstances. REMORTGAGE NOW!
The reason so many homeowners are currently on a standard variable rate deal is that they lost track of their current mortgage. It’s important not to fall back into this trap and to keep an eye on your mortgage rate as you would your day-to-day spending.
If you are currently on a fixed term mortgage, we strongly advise to begin shopping around three to four months before your current deal ends and is transferred to an SVR mortgage. This will give you sufficient time to weigh up the different options and for all the paperwork to go through.
Romans Mortgage Services can offer impartial advice on thousands of mortgage products from over 90 different lenders. To arrange a no-obligation appointment and find out if you are overpaying on your current mortgage, call 0118 3219 536.
Your home may be repossessed if you do not keep up repayments on your mortgage.
You may have to pay an early repayment charge to your existing lender if you remortgage.
There will be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances. The fee is up to 1%, but a typical fee is 0.3% of the amount borrowed.
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