SVR mortgages recommended for homeowners
Tue, 25 Aug 2009
With many households on a fixed-rate mortgage seeing their term come to an end in the autumn months, many experts are advising borrowers to revert to the standard variable rate as opposed to re-fixing.
Writing for This Is Money, Neil Simpson said fixed-rate mortgage customers should ignore letters from lenders advertising similar deals to remortgage to as currently banks standard variable rates represent good value.
Although fixed-rate mortgages currently have better headline rate than SVR deals, most will have charges and fees for setting up the new lending which negates any interest rate saving.
Mr Simpson is reported to have said: " Borrowers with banks such as Northern Rock and Woolwich, where standard rates are currently 4.79 and 4.99 per cent respectively, may be able to find better rates to switch on to at remortgage time."
Research from financial advice website ‘Unbiased’ showed that more homeowners are reverting to their banks standard variable rate to take advantage of the low interest rate environment which shows little signs of increasing until 2010.