Which mortgage: Consumer buy-to-let or buy-to-let for accidental landlords

Which? mortgage borrower survey finds 25% sitting on a standard variable rate

A national survey conducted by Which? has found that over one-third of mortgage borrowers are unaware of their current mortgage rate, a further 44% could only estimate their rate, and staggeringly one in four respondents are sitting on their lender’s standard variable mortgage rate.

For the 77% of borrowers that do not know their mortgage rate and are currently on fixed, tracker or discounted rates, their lack of awareness is probably not adversely affecting them right now. However, for the 25% of respondents sitting on their lender’s standard variable rate, it’s probably a different story.

Which? mortgage advisers calculated that borrowers with an SVR on an average priced home are likely paying as much as £347 per month more, and for borrowers in London this could be as much as £727 per month or £8,700 per year.

Mortgage rate apathy

22% of respondents on their lenders SVR, who have been on the same mortgage for at least five years, claimed that they had never thought about switching and 15% didn’t think it was worth the hassle.

Even though switching mortgages can make significant savings, the survey indicates a high level of borrower apathy. A startling 41% of those on an SVR said they would be unlikely to switch even if they came across a cheaper deal today.

While some borrowers choose to stay on an SVR for the short term due to its flexibility, e.g. they are planning on moving property or remortgaging in the near future, the standard variable rate is usually notably higher than other mortgage deals available from lenders and is rarely considered a good long-term option.

Borrowers encouraged to check their interest rates

Principal mortgage adviser at Which? David Blake urges all borrowers to check their mortgages’ interest rate to find out whether they are paying more than they need to. The remortgage market is very competitive at present, and there are considerable savings to be made by switching to a lower rate fixed term deal.

Younger borrowers are the most clued up

While the survey has thrown up some rather alarming statistics, it did reveal that younger borrowers are the most mortgage savvy.  Given the difficulties faced by first-time buyers entering the housing market, getting the best mortgage rate is likely to feature highly in their financial planning.

A reassuring 74% of borrowers aged 18-24 could confidently state their mortgage rate, indicating perhaps that their need to make savings wherever they can is a top priority.

Self-certified Sophisticated Investor

Please read

I declare that I am a self-certified sophisticated investor for the purposes of the restriction on promotion of non-mainstream pooled investments. I understand that this means:

I am a self-certified sophisticated investor because at least one of the following applies:

I accept that the investments to which the promotions will relate may expose me to a significant risk of losing all of the money or other property invested. I am aware that it is open to me seek advice from someone who specialises in advising on non-mainstream pooled investments.

High Net Worth Investor

Please read

I make this statement so that I can receive promotional communications which are exempt from the restriction on promotion of non-mainstream pooled investments. The exemption relates to certified high net worth investors and I declare that I qualify as such because at least one of the following applies to me:

STAY AHEAD OF THE MARKET

Sign up for first access to new developments and exclusive property investment opportunities.

We send limited and targeted emails on new launches and exclusive deals which best fit your areas. We are trusted by over 30,000 active buyers as their source for new stock.

  • New property developments
  • Professional market reports
  • Property deal alerts
  • Development updates
Manchester property investment

FIRST FOR NEWS AND KNOWLEDGE.

Receive trending news straight to your inbox and stay up to date on all of the property market trends and advice.

Established since 2005 we are a leading voice of authority and commentary on the UK property market. Our news is trusted by Apple News & Google News.

  • UK housing market
  • Mortgage & money
  • Buy-to-let landlords
  • Guides & advice

Talk to us

Speak to our UK property experts today:

 

+44 (0) 333 123 0320

Open from 9am-6pm GMT

 

+852 6699 9008

Open from 9am-6pm HKT