Analysis by moneysupermarket.com has found that the average Standard Variable Rate (SVR) across the UK mortgage market is 6.5 per cent - a full 2 per cent above the base rate – which will cost borrowers £12 billion more over just two years if they do not remortgage to a better deal.
moneysupermarket.com has found that despite this month’s base rate cut to 4.5 per cent, half of lenders (59) are charging an SVR of between 6.5 per cent – 7 per cent and a further 11 are charging more than 7 per cent. With nearly a quarter (23 per cent) of borrowers on their lenders’ SVR, there are huge savings to be made.
For example, a borrower with a typical mortgage of £100,000 could save £4,560 over two years if they remortgaged to Alliance & Leicester’s two year fixed rate deal at 4.24 per cent, compared with sticking to an average 6.5 per cent SVR - saving the 23 per cent of borrowers on their lenders’ SVR over £12 billion in just two years.
Louise Cuming, head of mortgages at price comparison website moneysupermarket.com, commented: "It is incredible that over half of all mortgage lenders are charging borrowers a full 2 per cent more on their SVR than the current base rate. Lenders rely on borrower apathy, enticing them in with competitive introductory deals and relying on them to stay put once the deal is over. I urge the quarter of borrowers who are paying the SVR to consider remortgaging to one of hundreds of competitive deals on the wider market or face wasting thousands of pounds in interest over the next year alone."
