There are a whole host of mortgage options, and this includes variable and fixed rates. The type a person goes to comes down to their own personal circumstances and financial situation, however once a fixed-rate finishes, many will be automatically rolled onto their lender’s Standard Variable Rate.
The price comparison giant has found that these households could see their monthly payments rise by up to £175 should they allow their mortgages to slip onto the SVR.
According to Comparethemarket.com, it means these homeowners could end up paying around £2,000 extra in interest each year.
Miles Robinson, Head of Mortgages at online mortgage broker Trussle, commented: “Lapsing onto your lender’s Standard Variable Rate (SVR) could significantly increase your monthly outgoings.
“If you’re about to fall onto the SVR, it’s time to consider switching to a new deal.
“Alarmingly, for the average borrower, the difference between a market-leading deal and the average SVR is around £4,500 in extra interest each year.
“To find out when your initial period is due to end, look at a copy of your original mortgage offer or call up your lender to find out.
“You should review your mortgage three to six months before the end of your initial period to give yourself enough time to find and switch to a new deal.
“With interest rates at an all-time low it may be possible to secure these ahead of time so we are urging those looking to remortgage, to start the process as soon as possible so they don’t pay more than they have to for any period of time.”
Meanwhile, Mark Gordon, Director of Money at Comparethemarket.com, said of the current mortgage market: “Before the coronavirus pandemic, the latest [Bank of England] data suggested how strong the property and mortgage markets were, with mortgage approvals at a six-year high.