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.”
Shekina is the deputy editor at Mortgage Solutions and commercial editor at Mortgage Solutions and Specialist Lending Solutions. She has nearly eight years of experience in the B2B publishing market, having previously covered the hospitality, retail, pet, accounting and jewellery sectors.
Shekina has worked for Mortgage Solutions and Specialist Lending Solutions for almost five years. Here, she covers the market’s breaking news stories, engages with professionals in the sector, and oversees any commercially agreed content in partnership with mortgage-related companies.
This includes presenting webinars and hosting roundtable discussions on developing themes in the mortgage sector.
She is an NCTJ-trained journalist and was nominated for the Headline Money Awards Mortgage Journalist of the Year in 2021.
In her spare time, Shekina likes to read, travel, listen to music and socialise with friends.
She currently reports on current events in the mortgage market and liaises with financial clients to produce sponsored content.
Follow her on Twitter at @ShekinaMS
