3 August 2021
Borrowers who switch to a new mortgage deal could make monthly savings of as much as £350 thanks to the introduction of new below-1% deals which have hit the market recently.
With rumours of a ‘remortgage rate war’ on the cards, experts are advising anyone coming to the end of their deal to remortgage while competition is hot.
Data from Moneyfacts.co.uk revealed how the average standard variable rate (SVR) – which is the rate borrowers revert to when their deal ends and they don’t switch – is currently 4.40%.
Yet, someone was coming to the end of a two-year fixed rate deal from 2019 (based on the average two-year fixed rate being 2.49%) could be facing a hike of 1.91% if they now revert to an SVR. This is a monthly payment increase of £204 if they do not secure a new deal.
Looking at it another way – if a borrower had the correct level of equity or enough deposit and their circumstances were right, they could be in a position to consider one of the record-low rate ‘sub-1%’ mortgage deals currently on offer.