Outstanding loans up 4.9%
Experian: Homeowners Could Save £ 5,000 By Switching
Borrowers could save more than Â£ 5,000 on their mortgage payments by switching to a new 2-year fixed rate offer, according to Experian and L&C Mortgages.
For example, a homeowner with a mortgage of Â£ 150,000 over 20 years on a Standard Variable Rate (SVR) from a lender of 4.49% will have a monthly repayment of Â£ 948.16.
The same mortgage on a 2 year 1.11% fixed rate remortgage deal will have a monthly payment of Â£ 697.23, saving Â£ 6,022.32 or Â£ 250.93 per month.
Factoring in the arrangement fee of Â£ 999 this would still leave a better off owner of Â£ 5,023.32 over the 2 year period.
Experian also found that nearly 6% of homeowners could end their fixed-term contracts within the next three months or over the next three months, and will therefore have to proceed with a new mortgage.
James Jones, Head of Consumer Affairs at Experian, said: âWith Christmas just around the corner, it’s that time of year when many of us are looking for ways to make our money grow, but many overlook them. opportunities to reduce the cost of existing loans.
âHomeowners may be able to realize substantial savings by switching to a new fixed rate mortgage deal, so we urge anyone with a soon-to-end solution to consider their options.
âDoing nothing will mean you will revert to your lender’s standard rate, which will usually result in an increase in your monthly payments.
âWith an interest rate hike looming, it would be worth exploring your options now and getting a new rate locked in.
âYou can get help exploring your options by asking a free mortgage broker for advice.
âIt’s also worth taking a moment to review your credit score and, if possible, make improvements before any formal credit check. “
David Hollingworth, Associate Director, Communications at L&C Mortgages, added: âAs we approach the end of the year, we often see an increase in spending and spending.
âAnd with the cost of living rising, it’s more important than ever for consumers to shop around and find a better deal.
âThey could save hundreds of pounds a month by switching to a fixed rate mortgage and also protect themselves against a rate hike.
âThere are still competitive offers in the market, but if the wait for an interest rate hike persists, the currently available offers may not last too long.
âUse a mortgage comparison to see if you’re on the cheapest deal or if you can save money by using another company’s offer.
âWhen thinking about the change, don’t forget to factor in all other costs and check if there are any early exit fees associated with your current deal.
“However, shopping around could help save thousands of pounds over a short period of time.”