It found that homeowners who remortgage from a lender’s standard variable rate (SVR) to a fixed product could save around £2,000 a year.
They calculated the cost of moving an outstanding mortgage of £150,000 to a two-year fixed rate deal, including paying a £999 fee, could save the borrower more than £4,500 over two years.
Furthermore, when moving the £150,000 mortgage to a fixed rate deal, L&G calculated the savings over a three-year period to be upwards of £6,000; certainly not to be sniffed at.
In fact, the savings might even be higher still if you are able to find your client a deal with no fees. And that shouldn’t be too difficult, because we are now in a lending environment where 40% of mortgage products now have no fees.
Rates still falling
According to Moneyfacts, last year the number of products with no fees was 1,709, now it is 2,007 – an increase of 17%.
And many of these no-fee deals are offering great fixed rate options including many under 2%.
In fact, analysis by Mortgage Brain reveals that mortgage rates have fallen for the second year in a row with some fixed rate deals falling greatly in the past four months.
It found that a 90% loan to value two-year fixed rate mortgage has become 8% cheaper since April.
While rates are still close to historic lows and the only likely movement is upwards, now is a great time to start getting in contact with all your SVR clients and talk to them about the money they could save now and in the future by remortgaging.
