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Beware of your Lender’s SVR

Could You Get a Better Deal?

Beware of your Lender’s SVR

With interest rates currently low, many borrowers are content to stick with their existing mortgage deal. However, as the monthly mortgage repayment is often a family’s major outgoing, it’s a good idea to review your mortgage on a regular basis, as you could  potentially save yourself money by remortgaging.

 A lender’s Standard Variable Rate (SVR)

If your current fixed-rate, tracker or discount deal is about to end or has already ended, it’s usually the case that you’ll be moved to your lender’s Standard Variable Rate (SVR). The SVR is usually pegged to a percentage above the bank base rate and can be subject to change by the lender. So, if you don’t do anything, you could be vulnerable to interest rate rises when they come. However, you could potentially save a substantial amount by moving your mortgage to a more attractive rate, either with your existing lender or to a different lender.

Many could get a better deal

There are currently around two million people on Standard Variable Rate mortgages who could remortgage and save money and it’s estimated that these homeowners could save a massive £10bn a year in interest payments. You might want to remortgage if your property has increased substantially in value. Remortgaging could also let you release cash from the equity tied up in your home. An increase in value might also enable you to move to a lower rate of interest. Remortgaging also gives you the chance to change the terms of your loan, allowing you to make higher repayments and so shorten the overall mortgage term.

You can also take the opportunity to raise additional cash against the value of your property to carry out home improvements.

We’re here to help

If you’re considering remortgaging your property, why not ask us for advice?