Don't rush in where agents fear to tread
- Borrowers encouraged to be patient
- No need to make the most of headline grabbing rates
Following last week's interest rate cut, Louise Cuming, head of mortgages at moneysupermarket.com said: "There's no doubt about it, SVR's are back in vogue following last week's base rate drop. For many customers simply reverting to the default SVR rate their lender subscribes them to at the end of their current deal may save money on their mortgage bills; as doing so incurs no fee. If customers were to change onto a fixed rate deal, a percentage fee may be charged, knocking off the bonus of a previously best buy fixed rate. As such, borrowers should be vigilant and not blinded by headline grabbing fixed rate deals.
"For example if you wanted to switch to an Alliance and Leicester interest only two year fixed rate at 4.89 per cent plus one per cent fee for a £150,000 mortgage, you would be spending an extra £1,170.00* over the two year period than if you were to default to their five per cent SVR. Whilst lenders quickly removed tracker rates for new customers in the wake of last week's base rate cut, the projection of further cuts means that borrowers might do best to play the waiting game on their SVR.
"Borrowers should make sure they are fully aware of the rate their provider moves them to at the end of their deal, and do the necessary shopping around to see if there is a deal which suits them better This isn't just the lowest number in the high street window, borrowers must factor in the arrangement fee, deposit required and whether or not their credit record will enable them to get the deal they want."
-Ends-
*please see tables below
|
Alliance & Leicester |
|
|
|
|
|
Capital & Interest |
|
|
|
|
|
|
Loan Amount |
Total Cost over 2 Years (4.49% + 1% fee) |
Total Cost over 2 Years (4.89% + 1% fee) |
Total Cost over 2 years (5.00% SVR) |
Difference Between SVR & 4.49% |
Difference Between SVR & 4.89% |
|
£50,000 |
£7,237.04 |
£7,517.12 |
£7,095.36 |
-£141.68 |
-£421.76 |
|
£100,000 |
£14,473.84 |
£15,034.48 |
£14,190.48 |
-£283.36 |
-£844.00 |
|
£130,000 |
£18,816.16 |
£19,544.80 |
£18,447.60 |
-£368.56 |
-£1,097.20 |
|
£135,000 |
£19,539.84 |
£20,296.56 |
£19,157.28 |
-£382.56 |
-£1,139.28 |
|
£140,000 |
£20,263.52 |
£21,048.32 |
£19,866.72 |
-£396.80 |
-£1,181.60 |
|
£143,000 |
£20,697.68 |
£21,499.28 |
£20,292.48 |
-£405.20 |
-£1,206.80 |
|
£145,000 |
£20,987.20 |
£21,799.84 |
£20,576.16 |
-£411.04 |
-£1,223.68 |
|
£149,000 |
£21,566.24 |
£22,401.44 |
£21,143.76 |
-£422.48 |
-£1,257.68 |
|
£150,000 |
£21,710.88 |
£22,551.60 |
£21,285.84 |
-£425.04 |
-£1,265.76 |
|
£200,000 |
£28,947.92 |
£30,068.96 |
£28,380.96 |
-£566.96 |
-£1,688.00 |
|
£250,000 |
£36,184.72 |
£37,586.08 |
£35,476.32 |
-£708.40 |
-£2,109.76 |
|
Sourced by www.moneysupermarket.com 12.11.2008 |
|
|
|
|
|
|
|
|
|
|
|
|
Interest Only |
|
|
|
|
|
|
Loan Amount |
Total Cost over 2 Years (4.49% + 1% fee) |
Total Cost over 2 Years (4.89% + 1% fee) |
Total Cost over 2 years (5.00% SVR) |
Difference Between SVR & 4.49% |
Difference Between SVR & 4.89% |
|
£50,000 |
£4,989.92 |
£5,390.00 |
£4,999.92 |
£10.00 |
-£390.08 |
|
£100,000 |
£9,980.08 |
£10,780.00 |
£10,000.08 |
£20.00 |
-£779.92 |
|
£130,000 |
£12,974.08 |
£14,014.00 |
£13,000.08 |
£26.00 |
-£1,013.92 |
|
£135,000 |
£13,473.12 |
£14,553.12 |
£13,500.00 |
£26.88 |
-£1,053.12 |
|
£140,000 |
£13,971.92 |
£15,092.00 |
£13,999.92 |
£28.00 |
-£1,092.08 |
|
£143,000 |
£14,271.44 |
£15,415.52 |
£14,299.92 |
£28.48 |
-£1,115.60 |
|
£145,000 |
£14,470.96 |
£15,631.12 |
£14,500.08 |
£29.12 |
-£1,131.04 |
|
£149,000 |
£14,870.24 |
£16,062.32 |
£14,899.92 |
£29.68 |
-£1,162.40 |
|
£150,000 |
£14,970.00 |
£16,170.00 |
£15,000.00 |
£30.00 |
-£1,170.00* |
|
£200,000 |
£19,959.92 |
£21,560.00 |
£19,999.92 |
£40.00 |
-£1,560.08 |
|
£250,000 |
£24,950.08 |
£26,950.00 |
£25,000.08 |
£50.00 |
-£1,949.92 |
|
Sourced by www.moneysupermarket.com 12.11.2008 |
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|
|
|
|
|
|
|
|
|
|
|
|
Abbey |
|
|
|
|
|
|
Capital & Interest |
|
|
|
|
|
|
Loan Amount |
Total Cost over 2 Years (4.49% + £995 fee) |
Total Cost over 2 Years (4.89% + £499 fee) |
Total Cost over 2 years (5.00% SVR) |
Difference Between SVR & 4.49% |
Difference Between SVR & 4.89% |
|
£50,000 |
£7,732.04 |
£7,516.12 |
£7,095.36 |
-£636.68 |
-£420.76 |
|
£100,000 |
£14,468.84 |
£14,533.48 |
£14,190.48 |
-£278.36 |
-£343.00 |
|
£130,000 |
£18,511.16 |
£18,743.80 |
£18,447.60 |
-£63.56 |
-£296.20 |
|
£135,000 |
£19,184.84 |
£19,445.56 |
£19,157.28 |
-£27.56 |
-£288.28 |
|
£140,000 |
£19,858.52 |
£20,147.32 |
£19,866.72 |
£8.20 |
-£280.60 |
|
£143,000 |
£20,262.68 |
£20,568.28 |
£20,292.48 |
£29.80 |
-£275.80 |
|
£145,000 |
£20,532.20 |
£20,848.84 |
£20,576.16 |
£43.96 |
-£272.68 |
|
£149,000 |
£21,071.24 |
£21,410.44 |
£21,143.76 |
£72.52 |
-£266.68 |
|
£150,000 |
£21,205.88 |
£21,550.60 |
£21,285.84 |
£79.96 |
-£264.76 |
|
£200,000 |
£27,942.92 |
£28,567.96 |
£28,380.96 |
£438.04 |
-£187.00 |
|
£250,000 |
£34,679.72 |
£35,585.08 |
£35,476.32 |
£796.60 |
-£108.76 |
|
Sourced by www.moneysupermarket.com 12.11.2008
|
|
|
|
|
|
Interest Only |
|
|
|
|
|
|
Loan Amount |
Total Cost over 2 Years (4.49% + £995 fee) |
Total Cost over 2 Years (4.89% + £499 fee) |
Total Cost over 2 years (5.00% SVR) |
Difference Between SVR & 4.49% |
Difference Between SVR & 4.89% |
|
£50,000 |
£5,484.92 |
£5,389.00 |
£4,999.92 |
-£485.00 |
-£389.08 |
|
£100,000 |
£9,975.08 |
£10,279.00 |
£10,000.08 |
£25.00 |
-£278.92 |
|
£130,000 |
£12,669.08 |
£13,213.00 |
£13,000.08 |
£331.00 |
-£212.92 |
|
£135,000 |
£13,118.12 |
£13,702.12 |
£13,500.00 |
£381.88 |
-£202.12 |
|
£140,000 |
£13,566.92 |
£14,191.00 |
£13,999.92 |
£433.00 |
-£191.08 |
|
£143,000 |
£13,836.44 |
£14,484.52 |
£14,299.92 |
£463.48 |
-£184.60 |
|
£145,000 |
£14,015.96 |
£14,680.12 |
£14,500.08 |
£484.12 |
-£180.04 |
|
£149,000 |
£14,375.24 |
£15,071.32 |
£14,899.92 |
£524.68 |
-£171.40 |
|
£150,000 |
£14,465.00 |
£15,169.00 |
£15,000.00 |
£535.00 |
-£169.00 |
|
£200,000 |
£18,954.92 |
£20,059.00 |
£19,999.92 |
£1,045.00 |
-£59.08 |
|
£250,000 |
£23,445.08 |
£24,949.00 |
£25,000.08 |
£1,555.00 |
£51.08 |
|
Sourced by www.moneysupermarket.com 12.11.2008 |
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