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You are here: Home > Media > Press releases > Record numbers of homeowners are now on a standard variable rate mortgage, but how many will miss the ‘remortgaging boat’?

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• Tracking data highlights that record numbers of homeowners are now on a standard variable rate mortgage;  increasing from 23% in January 2009 to 31% at the end of 2009
• The average fixed rate mortgage deal homeowners would be happy to fix on has dropped to 3.3%, compared to 4% in January 2009

With the base rate remaining at 0.5% for a whole year, tracking data from Unbiased.co.uk, the professional advice website, highlights the increasing trend for homeowners to remain on their lender’s standard variable rate (SVR) mortgage.  Now almost a third* (31%) of homeowners are on a standard variable rate mortgage compared to only 23% in January 2009**.

When describing their current mortgage situation, almost a third (29%) of homeowners state they are on their lender’s SVR mortgage and have no plans to change this.  This has increased from just a quarter (25%) who stated this in May 2009***.  Homeowners are increasingly making the most of low SVR mortgages, instead of choosing to remortgage onto a fixed rate or tracker deal.   

With best buy SVR mortgages still remaining lower than best buy fixed rate mortgage deals in the current market place; it appears homeowners are still refraining from remortgaging to a fixed rate deal until the base rate starts to rise.  Fixed rate deals need to be very low in order to attract homeowners, as the average amount homeowners are prepared to fix on for three years has decreased over the past year from 4% in January 2009 to just 3.3%.  With the best buys for three year fixed rate deals currently around 4.14%**** there is a stark contrast between homeowner’s ideals and reality.

Unbiased.co.uk’s research also shows there are only 10% of homeowners moving to another mortgage deal once their discounted, fixed or tracker rate deal comes to an end, compared to a slightly higher 12% in January 2009. 

Karen Barrett, chief executive of Unbiased.co.uk comments, “With the base rate now remaining at a record low of 0.5% for a full year, an increasing number of homeowners believe that staying on their lender’s SVR is the best option for them.  However, with the number of mortgage deals slowly increasing homeowners need to make sure they aren’t missing out on getting the best deals before the base rate starts to rise again, especially when in recent weeks some providers have been changing the SVR on their mortgages meaning not all of them are now as competitive as they once were.  There is also a stark difference between homeowner’s ideal fixed rate deal and what they could actually get in the current environment.

“It can be very confusing for homeowners to keep track of which is the best mortgage for them and when is the best time for them to move onto a new deal.  In the past, staying on your lender’s SVR was financially crippling, and while this has certainly changed, homeowners need to stay alert and active to ensure they don’t miss the best deals and see their monthly payments rocket.  Homeowners should seek mortgage advice from a whole of market mortgage adviser or an independent mortgage broker to ensure they get the best deal at the right time.  Only a whole of market mortgage adviser and independent mortgage broker can source products from the whole of the market place.”

You can carry out a confidential and free search to find a whole of market mortgage adviser near them by going to Unbiased.co.uk.

ENDS

* Opinium Research carried out an online poll of 2,005 UK adults aged 18+ from 20th to 23rd November 2009

** Opinium Research carried out an online poll of 2,088 British adults from Friday 23rd January to Tuesday 27th January 2009.

*** Opinium Research carried out an online poll of 2,026 British adults from Friday 15th to Tuesday 19th May 2009

**** http://moneyfacts.co.uk/compare/mortgages/fixed-3-year/ Sourced on 02.03.10

For further information on Unbiased.co.uk, the professional advice website pleases contact:

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Notes to Editors

Unbiased.co.uk, the professional advice website

Unbiased.co.uk is the free and confidential UK-wide search service matching consumers with the most appropriate local professional advisers for their needs.  In 2008, Unbiased.co.uk fulfilled over half a million searches for local, professional advice. 

The portal currently houses three professional advice searches: ‘find an IFA’, ‘find a mortgage adviser’, and ‘find a solicitor’, and is inviting accountants to sign up for its ‘find an accountant’ service.  These searches enable consumers to find relevant professional advisers by postcode, area of specialism and payment method, amongst other options. 

IFA Promotion, the organisation behind Unbiased.co.uk, is now in its 20th year, and was set up to promote the benefits of independent financial advice to the consumer. 

Unbiased.co.uk’s product provider sponsors

Registered Office: Unbiased.co.uk is the consumer brand of IFA Promotion Ltd, 90 St. Vincent Street, Glasgow G2 5UB. Registered in Scotland: No. 114606

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