Research reveals costly misconceptions among homeowners
The early nineties bring back painful memories for millions of UK homeowners. With Base Rate peaking at a crippling 14% in 1990, many were forced into negative equity, and repossessions were alarmingly high.
Ray Boulger of Charcol comments, "Having held their mortgages for well over a decade, these homeowners are almost certain to be stagnating on their lender's standard variable rate, without any penalty clause to keep them there. Although current Standard Variable Rates are nowhere near as high as they were in the early nineties there are still even better deals available. We're urging more than a million victims from the era of record high interest rates who have still not remortgaged to consider moving to one of the cheaper, far more flexible deals now on offer."
Charcol's research reveals a number of common misconceptions preventing these people from switching to a cheaper deal:
- About a quarter (27%) think they are tied in to their current mortgage
- Just 46% are aware they are on their lender's standard variable rate
- 51% could only roughly guess what the current interest rate is
- A staggering 86% admit to knowing they are not on one of the best deals
Boulger continues, "Switching to a better deal should be at the forefront of most borrowers' minds regardless of how long they have held their mortgage. Anybody who is on their lender's SVR, whether they are locked in or not, should at least look into the benefits and potential savings to be made from remortgaging. The initial cost will only be their time, while the benefits could run into thousands of pounds."