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Over a million borrowers lapse onto SVR before remortgaging – MoneySupermarket

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  • 14/08/2020
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Over a million borrowers lapse onto SVR before remortgaging – MoneySupermarket
Some 1.3 million mortgage holders are collectively spending an extra £175m a month because they have reverted to a standard variable rate (SVR) before applying for a remortgage, research from MoneySupermarket found.

 

According to the price comparison site, this accounts for 12 per cent of the 11 million outstanding mortgages in the UK and an average extra spend of £133.46 a month. 

Some borrowers were oblivious to the extra cost, as a survey of 2,640 remortgage enquirers found 15 per cent did not know they would be switched to an SVR or follow-on rate when their mortgage term ended. 

Compared to those who had remortgaged before, this was nearly double that of the seven per cent who said they were aware their rate would change.  

Emma Harvey, consumer affairs spokesperson at MoneySupermarket, said: “Standard variable rates on mortgages are notoriously expensive and with 15 per cent of those remortgaging being unaware of how they work, automatically lapsing onto them is a common and costly financial pitfall.  

“Regardless of whether you’re on an SVR mortgage or another type, there could still be significant savings to be made when your initial mortgage deal comes to an end. 

 

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