Summary
BORROWERS are wasting thousands of pounds each year by taking out a mortgage on their lender's standard variable rate (SVR).
David Hollingworth, at mortgage broker London Country, says: 'The only time you should borrow on a lender's SVR is if you already have a loan with them with penalties for early repayment. Even lenders with low SVRs, such as Nationwide and HSBC, can be bettered by lifetime trackers or short-term deals.' For example, Nationwide has a low SVR at 5.89pc giving a monthly pay rate, on the Pounds 100,000 loan above, of Pounds 637.59. 'But someone taking out Nationwide's lifetime tracker of 0.18pc above Bank of England base rate (4.68pc) would pay just Pounds 566.10 a month although there are redemption penalties for the first five years.' For people who want to be able to move at any time without penalty, Hinkley Rugby's lifetime tracker at 0.15pc above base (4.65pc) only costs Pounds 564.38 per month.See the full content of this document
Extract
Variable Rates Cost You More ; Moneymail: Borrow It
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