Switch from an SVR.
Being on an SVR, or Standard Variable Rate for your mortgage can be nerve-wracking, especially in times like these when nobody seems to know which direction the country is facing. Although it may seem like a lot to sort out, taking the time to switch can save you a significant amount and also offer peace of mind.
Once your current mortgage deal ends, you’ll automatically revert to the SVR. It was estimated, by online mortgage broker Trussle, that homeowners could save an average of £4,500 a year by switching to a market-leading deal. In 2018, Private Finance research estimated that borrowers could save up to £25,000 by switching from an SVR to a 10-year fixed rate deal. Whether that’s an extra holiday or savings in the pot, it’s not to be sniffed at.
With the thought that Bank of England interest rates may increase, borrowers nearing the end of their current deal would be wise to investigate their options for both short and long term deals.
Highlighted in 2017 by Citizens Advice, customers who don’t switch are effectively paying a ‘loyalty penalty’ They also highlighted that first time buyers, who generally have a higher borrowing sum, and vulnerable households with lower to middle range incomes, are the most likely to be paying over the odds once their initial deal has ended. This often happens because the initial deal is set low although the SVR has largely remained the same. Fears of the costs involved in switching can then often hold people back from shopping around.
If your current mortgage deal is due to end within the next 6 months, the advice is to start making enquiries now. If it all seems like too much of a headache and you’re putting it off, give our advisers a ring. They’ll be able to look at your individual circumstances and match you with a range of suitable options, taking the hard work away from you.