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Borrowers ‘sitting on SVRs’
21 April 2007
Moneysupermarket.com has reported nearly one in five people are sitting on their current lender’s standard variable rate (SVR).
The comparison site’s ‘Mortgage Map’ showed 19 per cent of UK mortgage holders had moved onto an SVR, with those in North Scotland the worst offenders at 35 per cent, followed by 25 per cent in Lancashire.
It also revealed the most popular type of mortgage was two to five-year fixed rates, with 27 per cent of borrowers opting for this type of product.
This contrasted with 4 per cent of borrowers choosing offset deals, despite this being a useful method of mitigating interest rate rises.
Louise Cuming, head of mortgages at moneysupermarket.com, said: “People are not making their money work hard for them. Despite recent rate rises, an unacceptable number are still on their lender’s SVR.
“As this is likely to be at least 2 per cent above the leading rates available, this could be costing borrowers dearly.”
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Nick Hanson, director of Hanson Financial Management, said: “People always leave their finances until tomorrow. I also think there is a loyalty element. Finance is such a serious part of our lives – people want to trust and stay on the right side of their lenders. We are being taught to be more aggressive, but I think as a nation we have a passive nature. A lot of people will stay with the status quo, which adds up to a huge amount in interest.”