Save A Fortune On Your Mortgage

Mortgages and Home

Updated on 16 July 2014 | 0 Comments

If you are paying the standard variable rate for your mortgage, the chances are you're paying too much.

Did you know that around a third of all homebuyers are paying over the odds for their mortgages?The main reason is apathy. Most people taking out a new mortgage will sign up for a special introductory deal at the start but many don't bother to check out their options once their initial fixed or discounted deal runs out. Instead, they sit back and allow the interest rate to revert to the lender's more expensive standard variable rate (SVR) and this costs people many thousands of pounds over the remaining life of their mortgage.According to the independent comparison website, Moneyfacts, the average SVR is currently 6.45%. On a £100,000 repayment mortgage over 25 years this would equate to monthly repayments of £672.09 whereas rates of as low as 4.5% are available for new mortgages. This lower interest rate reduces the monthly repayment to £555.83 -- saving £116.26 per month.If your mortgage is languishing on your lender's SVR then demand a better deal. If they're not interested in offering you the favourable rates that are offered to new customers then consider switching to a new lender even if you're liable for redemption penalties with your existing lender. A no-fee mortgage broker such as Fool partner London & Country Mortgages will do the sums for you to make sure it's still worth your while to switch.Where possible choose a flexible mortgage and use the savings to make overpayments each month. For example, paying an extra £70 a month on a £100,000 mortgage at 6.5% would cut your mortgage term by five years and save you almost £24,000 in interest payments.The lower the mortgage rate the more you'll save, so if you think you might be paying the SVR take action now and save yourself a fortune.Snap up a great deal in our Mortgage Centre.

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