Home Owners Missing Best Loan Deals
Since the Bank of England reduced the base rate of interest on savings and loans to its lowest ever level in the history of the bank, of just 0.5 per cent, a large percentage of borrowers with a home owner loan on a variable rate loan deal, have seen their repayments fall significantly as lenders standard variable rates reduce in line with the base rate.
In fact many borrowers with a tracker of variable rate home owner loan have saved several hundreds of pounds every month on their loan repayments and are therefore extremely happy with their existing loan and see absolutely no reason why they should consider switching their lender.
However, new research has found that somewhere in the region of 75 per cent of all borrowers with a standard variable rate home owner loan could actually save money on their monthly loan repayments by switching to a cheaper loan deal.
To obtain the best loan deals on a new home owner loan, a borrower must have a maximum loan to value of no more than 85 per cent and the research from Yorkshire Building Society has shown that approximately 1.7 million people with home owner loans in the UK would now qualify for a cheaper loan than they are currently paying.
It is estimated that if all these 1.7 million borrowers switched to a cheaper loan, they could collectively save somewhere in the region of £1.8 billion over the term of their loan.
Tom Girling of Yorkshire building society said “Our analysis shows that the vast majority could make significant savings by switching to a better rate mortgage. And with around three quarters having at least 15 per cent equity in their home, they are free to switch lender right now.”
