March 8, 2010

Are Your Right To Stick With Your Self Certified SVR?

You might have spent the last year comfortable on your self cert standard variable rate and the latest Bank of England decision to hold the base rate at 0.5% for the 12th month in a row will only make the decision to stay with your SVR easier – but should you be considering moving off the lender's default rate?

One year ago this month the Bank of England ended six months of dramatic rate cuts to try and stave off the effects of the recession, leaving base rate at a record low of 0.5%. Since then many people who had self cert mortgage rates have just stayed on their lender's low rate SVR, which follows the low base rate.

But is it time to consider changing? It doesn't seem like it at first glance, and the experts are predicting that base rate will stay low for some time to come.

Hannah-Mercedes Skenfield, mortgage expert at moneysupermarket.com says: "Undoubtedly the biggest winners from the fall in interest rates have been those consumers who have been sat on SVRs. Traditionally lenders' SVRs have usually been higher than the deal that was ending so consumers would have to remortgage as a result. Now we have a situation where many consumers are sitting on extremely low rates and have no incentive to move."

But Moneysupermarket.com says it has started to see SVRs starting to increase again, and rates for remortgaging starting to fall so for some consumers, now is the time to consider looking for an alternative deal. Rates can only go up and it might be wise to catch them before they rocket.

If you are unsure what to do, talk to a professional mortgage adviser. They will be able to assess your finances and search the market to see if there is a better alternative remortgage options for you. Remember – it's not all about the short-term, a good mortgage adviser will remind you that paying slightly more now may save you a fortune in the future.

SOURCE: Moneysupermarket.com, BoE, 04/03/10

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