- The average person will spend £813 on Christmas
- Remortgaging away from a Standard Variable Rate (SVR) could save borrowers over £876 a year
Charcol has calculated that over 3 million borrowers could pay for this year’s festivities just by moving away from a lender’s uncompetitive Standard Variable Rate (SVR). These borrowers are potentially wasting a staggering combined total of over £235 million a year.
Elliot Nathan, product development manager at Charcol, comments: “With at least 28% of borrowers still paying a lender’s Standard Variable Rate perhaps the added expense of Christmas will spur them into action. Hopefully the chance to have an effectively free Christmas and the realisation that so much money is being wasted each year, will mean that 2005 is the year when borrowers paying an SVR is dramatically reduced.”
A borrower with an average £55,000 repayment mortgage (the average borrowing of those on SVR) who switches from a typical SVR of 6.8%, 6.9% APR to a market-leading deal with a rate of 4.64%, 6.4% APR would save over £73 a month, or £876 over the course of a year. For those with a larger mortgage, the savings will obviously be higher.
Nathan continues, “Christmas and the New Year period is always a time for relaxing and winding down, but being lethargic on the largest financial commitment that most of us will ever have just does not make sense. Remortgaging is not as time consuming as many people believe it is and the rewards to be gained from arranging a new loan are there for all to see.”
To help borrowers review their situation and see whether remortgaging could save them money, Charcol is offering an obligation free Remortgage Check Service. The review takes into account any early repayment charges and other fees they might have to pay to make this switch and borrowers are in no way required to act upon the recommendations given.