Today in 2019, there are thousands of people across the United Kingdom that are currently paying a Standard Variable Rate which could be due to a number of reasons including their product has expired and haven’t found find time to change deals. 

With the average Standard Variable Rate being 4.9%, the average 2-year fixed rate deal 2.51% and five-year fix rate deal 2.92% in December 2018[1], this means that around 3.5 million people are paying an extra 2.39% or 1.98%. 

To put this numerically, for an outstanding mortgage amount of £200,000 this equates to an additional £4,780 or £3,960 a year.

I will start by saying there are some very good reasons for being on a Standard Variable Rate such as there are generally no Early Repayment Charges and there are typically no arrangement fees.  Ultimately, they provide you with flexibility

However, for people who plan on living in the same property for the next 2, 3+ or even 5 years then there has never been a better time to change to a fixed rate deal.  This is because the gap between the average maturing two-year fixed rate mortgage & lenders’ standard variable rate hit its highest level since February 2008.  For example, if you were set up with a 2-year fixed rate deal in early 2017 your interest rate will almost double when it expires this year.  This shows how important it is to shop around to find the competitive deal for you and your needs.

If you do not know if you are on a Standard Variable Rate then you are not alone, many people across the country are unsure.  There are a few ways to tell:

1)    Did your mortgage payment increase in November or December 2017 and September or October 2018?

2)    How long have you had your mortgage product?  If you have had a mortgage product with the same lender for over 5 years then it is likely you are on their Standard Variable Rate

3)    Have a look at your last annual mortgage statement.  It will say the product you are on and the interest rate you are paying.

4)    If you are still unsure, call your mortgage lender and they will be able to tell you.

In fact, 81% of British people believe their mortgage lenders quietly hope they will slip onto a Standard Variable Rate[2].  So, it is definitely worth checking and seeing if you are able to save yourself hundreds of pounds.

If you are on or about to go onto a Standard Variable Rate and want to have a discussion about how if we are able to save you money then please use our live chat to talk to one of our Mortgage Advisers or call us on 01923 853 080.