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Borrowers sticking with SVR

Borrowers sticking with SVR

Category: Mortgages

Updated: 17/08/2009
First Published: 17/08/2009

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Homeowners are increasingly choosing to stay on their lender's standard variable rate (SVR) rather than remortgaging to a new fixed rate mortgage deal.

New research from Unbiased.co.uk has found 27% of homeowners are now sitting tight on their SVR compared with 23% earlier in the year.

In addition, exactly a quarter of those currently exercising the SVR option said they had no immediate plans to change their thinking.

Given that the best SVRs on the market generally remain lower than the best fixed rate deals, it appears many borrowers will only consider a new mortgage deal once the base rate starts to rise.

"We have gone through a period of falling base rate, making SVRs suddenly an attractive option compared to many fixed rate deals," said David Elms, the website's chief executive. "It is however worth noting that fixed rate deals will increase sharply should the base rate go up and borrowers may find competitive fixed rate deals hard to come by.

"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 where they can rely on monthly payments not suddenly rocketing."

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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