Do you know the mortgage rate that you're currently paying? Despite the fact that there are rates below 4.5%, research by Bradford & Bingley has found, of the 11 million mortgage holders in the UK, 30% are paying their lender's Standard Variable Rate (SVR) of around 6.75% APR. Why are so many people paying such high interest rates on there mortgages?
Well, the answer appears to be down to lack of understanding of the re-mortgaging process. Of those asked, a third believe re-mortgaging to be too time consuming, while 28% state it's too expensive. And over one in ten believe that you can only re-mortgage when you move home.
This lack of knowledge is costing mortgage holders dearly. It's reckoned that the 3.3 million mortgage holders in the UK currently paying the lender SVR could save around £6 billion a year in mortgage payments, simply by switching to a market leading deal.
Of course, there are other factors that can increase the expense of re-mortgaging. Having to pay for valuations and legal fees can increase the cost, as can arrangement fees. However, a number of lenders will cover the cost of surveys and legal fees for you. And although few top deals charge arrangement fees of less than £300, you may find choosing a lender offering a slightly more expensive rate but lower fee will actually save you money in the long run.
Time is also clearly a crucial factor as many people simply do not have the time to shop around for a better deal. However, mortgage "Best Buys" are generally listed in the weekend Money sections of national newspapers and mortgage brokers such as Mortgage Quest are always available to search out good deals for you. And whilst this service isn't free, we could secure deals that are not commonly available and so could save you even more money. Most re-mortgages take four to six weeks to complete. In most cases, after taking all the savings into account, most people paying the lender's SVR will save money by re-mortgaging to a new lender. So if you're currently paying
Your lender's SVR, take control and find yourself a more competitive deal. And if you find it a little daunting, remember, you can call Mortgage Quest Ltd and we will be more than pleased to assist.