Recent research has found that the difference between a lenders’ standard variable rate (SVR) and the average maturing two year fixed rate mortgage is now at its highest level since February 2008 with borrowers who took a two year fixed rate deal in the early part of 2017 now looking to more than double their fixed rate if they were to fall back onto a SVR.
Now having the largest gap in over 10 years, the rate of 4.90% compared to 2.31% may surprise many homeowners and reinforces the recent advice from One 77 Mortgages for homeowners to start shopping around for a better deal of their current rate.
The gap is accentuated by the fact that early 2017 saw dramatic and aggressive drops in rates from the same period the previous year (January 2016: 2.56% – January 2017: 2.31%).
What this means in real terms is that should a homeowners fall back onto their lenders SVR their monthly repayments could increase by over £270 a month (over £3,250 per annum).
With such a large rise in monthly repayments, coupled with the predicted growth in the remortgage market for 2019, there is no better time to act on getting a better rate and start saving than today.
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