People are sticking to standard variable rate mortgages


People in the UK are deciding to stick with standard variable rate (SVR) mortgages in the current economic climate, new research has shown.
Carried out by Halifax, the study revealed this is the case even though the gap between monthly payments for fixed-rate home loans and SVR deals is becoming increasingly narrow.
Stephen Noakes, mortgage director at Halifax, noted the fact SVRs have stayed at historically low levels goes some way to explaining why the remortgage market has remained slow since 2008.
Mr Noakes said it is wise for people to remain on an SVR rate at present, observing this is “a very different decision to the historical norm where customers who stayed put and didn’t remortgage saw a sizeable increase in their monthly payment”.
It was demonstrated that activity on the remortgage market has continued to shrink – dipping by 75 per cent since 2007 – even though fixed-rate mortgages have dropped by 164 basis points across the last half-decade.
Mr Noakes added consumers are only thinking about remortgaging if it will result in their monthly payments being reduced.

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