Remortgaging cheaper than most SVRs, says Moneysupermarket.com
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Eighty-five per cent of standard variable rates are more expensive than the cheapest two year fixed rate including fees, according to Moneysupermarket.com.
The comparison website claims now is the time to remortgage as other lenders are expected to increase their SVR rates.
Moneysupermarket.com mortgages channel manager Hannah-Mercedes Skenfield says remortgaging is the best option for most people despite the prospect of an arrangement fee, as many SVR deals are still more expensive even with the fee taken into consideration.
She says :”These figures really show that for many people, now is the time to switch. The prospect of an arrangement fee can be off putting, however, our analysis shows that even when taking the fee into consideration and provided you have at least 25 per cent equity in your property, the vast majority of SVR deals do not compete with the top fixed rates.
Skenfield adds that trackers would be a better option than an SVR at the moment, with only seven cheaper SVR deals than the lowest priced tracker.
She says: “With only seven cheaper SVR deals than the best tracker it is unlikely you are making a saving by remaining on your current SVR deal.”
John Charcol senior technical manager Ray Boulger says increased SVRs and cheaper rates for new mortgages means people with 20 per cent equity in their property should think about remortgaging.
He says: “Remortgage activity fell steadily throughout the whole of last year but the combination of actual increases in SVRs, plus fears of increases, coupled with the cheaper rates now available for new mortgages, means that anyone paying an SVR of at least 3.5 per cent, or about to revert to one, should consider a remortgage if they have at least 20 per cent equity in their property.”
The figures show the best two-year fixed rate mortgage is First Direct’s 3.29 per cent deal with a £998 fee. Alternatively, the best tracker deal is Alliance & Leicester’s two-year deal, which has a rate of 2.49 per cent and a £995 fee.
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Readers' comments (1)
Evan Owen | 8 Feb 2010 5:09 pm
Is Nic Cicutti still editor of that er...site?
You would expect them to say something like that?
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