How many people on standard variable rate mortgages?

Aaron Strutt Image

Roughly half of Britain’s 11m mortgage borrowers are on fixed rates, while the other half are on a tracker, standard variable or discounted rates.

The current value of variable rate mortgages is approximately £611bn, and there are 1.5m borrowers on bank rate trackers.

Aaron Strutt, product director at Trinity Financial, says: “There are still huge numbers of borrowers paying expensive standard variable rates for a host of different reasons. 

“Some lenders are not offering interest-only mortgages anymore, so they request customers to switch to capital repayment, while others have let their property or possibly missed a payment. Other lenders simply do not have a retention policy.

“We recently arranged a remortgage for one client with a £1 million mortgage and they were stuck on a 6.08% SVR. Our client recently started working on a self-employed basis and no longer met the bank's acceptance criteria. Thankfully we secured her a much more competitively priced two-year discounted rate through one of the building societies.” 

If you want to swap to a lower rate, the first thing to do is call your lender and ask what they will offer you to stay. Then research the market to find out if you can get a better deal.

Is it time to just stay on the SVR, or should you be shopping around for a new deal?

Many of the lenders have high standard variable rates - but they are doing more to ensure customers can switch to better deals.  

Lloyds Banking Group is by far the biggest player in the product transfer market, but other lenders are trying to catch up. Over the last year, Metro Bank, Virgin Money and Kent Reliance have all invested in their rate switch systems to ensure they keep as many customers as possible.

If you are lucky enough to have one of Barclays incredibly low 0.19% lifetime trackers or Nationwide's 2% base rate term trackers, you probably will not want to remortgage. 

However, if you are paying Leeds Building Society’s 5.69% or Accord Mortgages 5.79% standard variable rates – it is probably time to switch.   

The most competitively priced rates are reserved for those will a 35% or 40% deposit. Although, the 15% and 20% deposit rates are also incredibly good.

For help to remortgage to a new rate call Trinity Financial on 020 7016 0790

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