Are you paying the right amount on your mortgage?
Understanding your mortgage choices: don't miss out on savings
Hey there! Let's dive into the world of mortgages and understand how they might be affecting you. I'll make it simple so you can stay informed.
What's up with mortgage rates?
If you own a home and have a mortgage, there's something important to know. Around 27% of homeowners are on something called a "standard variable rate" or SVR. This rate is usually higher than what they were paying before.
What's an svr?
Think of an SVR as a kind of mortgage rate that can change whenever the bank decides. It's usually much higher than the rate you had during your previous deal. So, if your mortgage deal ends, you might end up on this higher rate.
Why do people end up on svrs?
Sometimes, when a mortgage deal ends, people don't realize it. They get moved to the SVR automatically. This can happen because they don't know there are other options available.
The price difference
Here's the thing: SVRs can be 2% to 3% more expensive than a fixed-rate mortgage. That's like paying extra just because you're on this higher rate.
How does it impact your pocket?
Let's say you have a £200,000 mortgage spread over 25 years for a £250,000 property. If you're on an SVR, you could end up paying hundreds more in interest each month compared to a fixed-rate mortgage.
Why people stay on svrs
Sometimes, people don't switch to better rates because they think it's too much hassle or they're worried about negative equity – when the property value is less than the mortgage. But there are ways around these concerns.
Good news for the future
There's good news on the horizon. Mortgage rates are expected to come down this autumn. Inflation is going down, and banks are paying less to borrow money. This means mortgage rates could drop, making things better for homeowners and buyers.
What can you do?
If your mortgage deal is ending soon, don't worry. You can contact a mortgage broker. They're experts who can help you find the best deal for your situation. They'll keep you up to date on what's happening in the mortgage world and help you get the lowest rates possible.
Remember, being informed about your mortgage options can save you money in the long run. So, reach out to a mortgage broker and make the most of your choices!
