If you're sitting on your lender's standard variable rate you could save thousands by remortgaging.
Millions of mortgage borrowers could save thousands of pounds a year by remortgaging from their lender’s standard variable rate (SVR), according to new research.
The study by HSBC revealed that a whopping 4.3 million mortgage borrowers – over a third (39%) of the total mortgage market – are currently sat on their lender’s SVR. This is the rate you move onto when you come to the end of a fixed rate or tracker period. And it’s a rate that can be increased at any time, irrespective of what happens with Bank Base Rate.
The average SVR right now is a significant 4.99%.
But so long as you have at least 10% equity, moving to a new deal, and potentially saving thousands, should be within your reach.
HSBC gives an example of a borrower with a 90% loan-to-value mortgage on a property worth £246,600. By moving from an SVR of 4.99% to a two-year discount rate of 2.89%, they would save £3,420 in interest payments each year!
So if you’re on your lender’s SVR and fancy cutting your mortgage payments, let’s take a look at the best remortgage deals around at the moment.
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Two-year fixed rates
Two-year fixed rate mortgages have never been cheaper, according to financial data provider Moneyfacts, with the average rate now sat at just 3.28%. But the leading remortgage deals come with even more enticing rates, as the table below demonstrates.
Remember, these are just the lowest interest rates on offer; depending on the size of your mortgage it may work out cheaper to go for a slightly higher rate but a smaller mortgage fee.
|
Lender |
LTV |
Interest rate |
Mortgage fee |
How to apply |
|
Chelsea Building Society |
65% |
1.44% |
£1,675 |
|
|
Tesco Bank |
75% |
1.79% |
£1,495 |
|
|
Platform |
80% |
2.24% |
£999 |
Available through mortgage brokers |
|
Post Office |
90% |
2.95% |
£995 |
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Five-year fixed rates
With mortgage rates so low, it can make sense to fix your rate for longer. Not only do you have certainty about your monthly payments for longer, but you also avoid the cost of regularly remortgaging. However, that added certainty does come at a premium.
|
Lender |
LTV |
Interest rate |
Mortgage fee |
How to apply |
|
Post Office |
60% |
2.68% |
£995 |
|
|
Leeds Building Society |
75% |
2.89% |
£799 |
|
|
Leeds Building Society |
80% |
2.99% |
£999 |
|
|
Post Office |
90% |
4.09% |
£995 |
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Two-year tracker
While fixed rates are enormously popular at the moment, the cheapest rates are actually found on tracker mortgages. Remember that this is a gamble though – if and when Bank Base Rate begins to rise, your rate and mortgage repayments will too.
|
Lender |
LTV |
Interest rate |
Mortgage fee |
How to apply |
|
TSB |
60% |
1.39% (Bank Base Rate plus 0.89%) |
£2,260 |
Call 0808 274 3071 |
|
Nationwide |
70% |
1.44% (Bank Base Rate plus 0.94%) |
£999 |
|
|
Nationwide |
80% |
1.94% (Bank Base Rate plus 1.44%) |
£999 |
|
|
Hinckley & Rugby Building Society |
90% |
3.69% (Bank Base Rate plus 3.19%) |
£990 |
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Two-year discounted variable
The rates on offer from discounted variable mortgages are entirely at the mercy of the mortgage lender. They operate on a discount from the lender’s SVR but, as we’ve already highlighted, that SVR can be changed at any time. So while the rates look attractive, they are a risky choice.
|
Lender |
LTV |
Interest rate |
Mortgage fee |
How to apply |
|
HSBC |
60% |
0.99% (2.95% discount from lender’s SVR) |
£1,999 |
Call 0808 115 8734 |
|
Principality Building Society |
75% |
1.65% (3.34% discount from lender’s SVR) |
£994 |
Apply in branch |
|
Hinckley & Rugby Building Society |
80% |
1.85% (3.79% discount from lender’s SVR) |
£999 |
|
|
Leek United Building Society |
90% |
2.49% (2.7% discount from lender’s SVR) |
£199 |
Apply in branch |
This article aims to give information, not advice. Always do your own research and/or seek out advice from a regulated broker before acting on anything contained in this article.
Your home or property may be repossessed if you do not keep up repayments on your mortgage.
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Fixed mortgage rates keep tumbling