House Owners Urged to Remortgage compared with Transitioning to a Lender SVR
The year 2019 is in full swing and those house owners who have made resolutions should in particular have one item on that list. If a two year deal was in fact obtained in January of 2017, a new deal in the form of a remortgage should be on the to do list in order to side step paying the increased cost from lender SVR. Two year deals will automatically be transitioned to the lender SVR as those deals mature during the month of January. Housing experts are urging those house owners who have not remortgaged to a fixed rate deal to do so before their monthly mortgage costs increase.
The transition to a lender SVR from a deal which is maturing can be quite painful. Housing specialists are urging those who will transition to a lender SVR this month to check on the possibility of a remortgage and avoid a possible massive increase in the monthly mortgage payment amount.
According to the latest economic data, the average interest paid on a deal obtained in the month of January two years ago was 2.31%. This is quite a bit lower than the current average Standard Variable Rate on most deals offered by lenders which is 4.9%.
For house owners holding a 25 year mortgage in the amount of £200,000, transitioning to a lender SVR would mean an increase of almost £280 per month. That is an increase of more than £3,300 in the yearly amount of mortgage payments.
Remortgaging to a fixed rate deal now can quickly change the financial complexion of a household. Housing experts see this as quite a favourable time to consider a fixed rate remortgage instead of transitioning to the lender SVR and pay a much higher price each month due to a higher interest rate.