HOMEOWNERS could save tens of thousands of pounds by moving onto a ten-year fixed-rate mortgage.
It’s thought up to two million mortgage borrowers haven’t changed their Standard Variable Rate (SVR) for six months or more.
And failing to lock in a long-term fix could be costing borrowers a small fortune.
Private Finance research has found switching to a fixed rate for a decade can save an average of £229 a month.
The average SVR was 4.33% in August 2018 according to the Bank of England. An SVR borrower with the typical loan of £171,936 would therefore be paying £620 per month in interest alone and would have made £64,938 in interest payments over a 10 year timeframe.
However, if they switched to today’s average 10 year fixed rate of 2.73%, they would pay £229 less in interest each month.
That’s a saving of more than £25,000 over ten years.
Potentially, it means people can pay off their mortgage five years earlier – if they put the spare cash straight back into making over-payments.
Managing Director of Visionary Finance, Hiten Ganatra, said: “Borrowers should regularly review their mortgages to ensure they are getting the best value for money and aren’t getting stuck on a variable rate.
“It may seem like time spent looking up new deals could be used on a night in front of the television or out at the pub instead, but trust me, it pays off in the end.
“By making the effort to be proactive, borrowers are able to avoid future rate rises.
“It won’t work for everyone as long term fixed rates can limit flexibility, but it may do so for you. The best thing to do is give me and my team a call and we will talk you through what options best suit your circumstances.”
Find out if it is something that could work for you by getting in touch with our experienced team of advisers.
- And don’t forget we are an independent fee free mortgage broker. Call us on: 01908 465100.