By Elliot Wright, 3rd March 2010
Three million borrowers in the UK do not know the rate of
interest at which they are currently repaying their mortgage,
according to Post Office Mortgages.
35% of borrowers are currently repaying their mortgage at their
lender's Standard Variable Rate (SVR), possibly because they
believe that they are on the lowest monthly repayments on offer.
Yet nearly a third of these do not know their mortgage rate, and
are only assuming that their SVR is the best rate for them.
In reality there could be a much lower rate available elsewhere,
especially with the Bank of England base rate standing at 0.5%.
Furthermore, 49% believe they can overpay but are not taking
advantage of this facility at present.
Post Office Personal Lending Director, Marco Hughes,
said: "Although it might seem that staying on your current
SVR is the easiest thing to do, you are much more vulnerable to
interest rate rises.
"Some providers have increased their SVRs quite significantly
even though the Bank of England base rate has not moved and as a
result many borrowers are seeing their monthly mortgage repayments
increase more quickly than they thought.
"If you're thinking about switching mortgage, now is the best
time to do it, before rates rise further. With many SVRs at
or above 4% there are already better deals to be had out there.
"Switching mortgage does not have to be a stressful experience
and spending a bit of time searching and comparing deals could save
you a significant amount of money in the long term."
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