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Save money with a new cheap mortgage

Date: Wed, 24 Aug 2005

Homeowners could save around £12 billion by remortgaging their property.

Price comparison website moneysupermarket.com suggests that many people could take advantage of the growing number of cheap mortgage offers to make substantial savings.

In particular, borrowers should be aware that their mortgage is unlikely to be very competitive once the home loan reverts to its standard variable rate (SVR).

Research by moneysupermarket discovered that over 50 per cent of lenders have a standard mortgage rate that is two per cent higher than the UK's base rate.

"It is incredible that over half of all mortgage lenders are charging borrowers a full two per cent more on their SVR [standard variable rate] than the current base rate,” said Louise Cuming, head of mortgages at moneysupermarket.

“Lenders rely on borrower apathy, enticing them in with competitive introductory deals and relying on them to stay put once the deal is over," she added.

Moneysupermarket estimate that a borrower paying a SVR of 6.5 per cent could save £4.650 over two years by switching to a more competitive fixed-rate mortgage.


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