81% of Brits believe their mortgage providers want them to slip onto SVRs
Some 81% of Brits believed their mortgage providers “quietly hope” they will slip onto their standard variable rate (SVR) at the end of their fixed rate period, a YouGov survey has found.
The survey on behalf of ‘always-on’ mortgage switching platform, Dashly, showed nearly four in 10 (38%) borrowers have been on their mortgage lender’s SVR at some point in the past.
Of these people 17% said they have been on their lender’s SVR for up to 12 months and 21% said they have been on their lender’s SVR for 12 months or more.
Ross Boyd, founder, Dashly, said: “That the vast majority of borrowers believe their mortgage providers quietly hope they’ll slip onto their SVR should be a serious wake-up call to UK lenders.
“It suggests the relationship they have with borrowers is transactional at best and dysfunctional at worst. What’s crystal clear is that very few people believe lenders have their best interests at heart but are in it purely for themselves.
“More worrying still, borrower apathy or a simple lack of awareness has seen nearly four in 10 people spend time on their lender’s much more expensive standard variable rate at the end of their fixed rate period. Each month this happens people will be spending potentially hundreds of pounds or more unnecessarily.
“We live in an increasingly customer-centric age and, believe it or not, many banks don’t actually want customers to default onto SVRs. It’s these progressive lenders that are much more in sync with where the customer relationship is heading.”
Less than half (45%) could confirm they had never been on their lender’s SVR, while 18% had no idea whether they had or not.
Nearly half of those polled (47%) said they do not believe their current mortgage provider would care if they moved to another lender — a reflection of the dysfunctional relationship between UK borrowers and lenders.
Only 38% of people felt their mortgage provider would care if they took their business elsewhere while 15% said they didn’t know whether their lender would care or not.
Dilpreet Bhagrath, mortgage expert at online mortgage broker, Trussle, added: “One in three borrowers aren’t switching to a more suitable deal when their fixed rate comes to an end, and this is down to a misunderstanding around mortgage pricing, lack of awareness of when and how to avoid their lender’s SVR and not enough transparency when it comes to crucial information about their current mortgage.
“As part of the Mortgage Switch Guarantee, we’re asking all lenders to standardise the process when it comes to informing customers about the initial term coming to an end and encourage them to think about remortgaging.”