According to a mortgage broking firm, more than 3 million home-owners are feeling the effects of recent interest rate rises. The broker said that many of the 3 million people are subject to their mortgage lender’s standard variable rate, meaning an impact on finances every time rates rise. A further 0.25% interest rate rise would apparently increase an average £109,000, 25 year mortgage payments by £210.
Our View
For the majority of people that are subject to a lender’s standard variable rate, you are literally throwing money away. Whilst some people have to stay on the standard variable rate, the majority do not. By just asking your lender for a move onto a fixed or discounted rate, could save hundreds of pounds each year. One word of warning though – make sure that any charges levied for moving from the standard variable rate to a different rate do not outweigh the benefits of switching!