A recent study of the housing market has found that a third of borrowers end up paying over £2,000 extra in interest by not remortgaging when their initial mortgage deal runs out.
Many lenders have special mortgage deals which give certain discounts for the first few years of the mortgage, and then switch to the bank’s default mortgage standard variable rate after the this timeframe.
However, for 21 months, homeowners seem to be forgetting to change their mortgage deals, and not changing things up. Because of this, people are spending time paying out on the standard variable rate of their banks, which often is higher than the competitive deals out there.
Over 21 months, this adds up to an average of £2,445. This is a lot of money to pay out, which could be avoided, and is being avoided by more savvy homeowners who are switching up their mortgage deals.
Standard variable rates seem to be rising, despite the Bank of England base rate remaining at 0.5 per cent.
You do, however, have to be careful when searching for a new mortgage deal. Mortgage deals can come with certain factors that can change their suitability. For example, a deal may have a lower interest rate, but last longer overall, or some may have extra charges to make early payments, or to swap to a new mortgage deal.
You should make sure that the mortgage you are on is the one that is most suitable for you, and can save you the most amount of money.
