Homeowners stick on standard variable rate mortgages

According to research from Unbiased.co.uk, some 27% of homeowners now have standard variable rate mortgages.

More homeowners are opting to stick on the low standard variable rate (SVR) that their mortgage lender offers rather than remortgage.

25% of homeowners state they are on their lender’s SVR mortgage and have no plans to change.

Currently the best buy standard variable rate mortgages generally remain lower than the best fixed rate mortgages, making it more attractive to stay with the SVR.

Of course, as and when the base rate starts to rise again then homeowners will need to consider the need to remortgage.

As David Elms, Chief Executive of Unbiased.co.uk says ‘While in the past it could be financially crippling to remain on your lender’s standard variable rate after your mortgage deal had ended, now it is becoming a more popular option.

It is however worth noting that fixed rate deals will sharply increase should the base rate go up and borrowers may find competitive fixed rate deals hard to come by.’

He added ‘Those remaining on SVRs need to stay alert and once the base rate starts to rise again and the market improves, ensure they act fast to secure a new deal which they can rely on not to suddenly rocket in monthly payments.’