Homeowners urged to switch mortgages
September 18, 2007 by admin
Filed under News, News-Mortgages
Homeowners failing to look for a better deal on their expiring fixed rate mortgage could each stand to lose £2,600 if they stay on their provider’s standard variable rate (SVR) for two years, according to Moneysupermarket.com.
The price comparison website found that such mortgage “inertia” could end up costing British homeowners £5.9 billion a year, with an estimated one in five households stuck on an SVR mortgage.
Louise Cuming, head of mortgages at the website, said: “This shows how vital it is for homeowners to find the most competitive product when their fixed rate deal comes to an end.
“Providers have long played on the fact homeowners can be slow to react when their deal ends. Switching homeowners to an SVR increases bank and building society profits at our expense.”
Since the effects of the US sub-prime credit market crisis began to be felt by British banks and mortgage providers, many have begun to push up the rates on their tracker mortgages.
However, these rates are usually still much closer to the Bank of England base rate of 5.75 per cent than SVR rates, which currently stand at well above seven per cent on average.
