Homeowners across the UK could save £4,600 a year switching their mortgage deals, according to new data from mortgage broker Mojo Mortgages.
The firm has uncovered a significant 3.20 per cent difference between the average Standard Variable Rate (SVR) and the average 5-year fixed rate among the Big Six lenders.
With interest rates currently in flux, homeowners are being urged to reassess their mortgage options and potentially save thousands of pounds annually.
Some 600,000 homeowners are potentially missing out due to making the switch, according to research conducted by UK Finance.
Breaking down the potential savings, Mojo Mortgages’ data reveals striking figures for an average-priced UK home of £267,100 with a 75 per cent loan-to-value ratio.
Homeowners could save a substantial £385 per month by switching from an SVR to a five-year fixed rate mortgage.
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Experts are urging people to check their mortgage deal to see if they can save money GETTY This amounts to a saving of £4,620 annually, providing significant relief amidst the current cost of living crisis or a boost to savings.
Even households opting for a shorter two-year fixed rate offers identical monthly and annual savings.
These figures underscore the potential financial benefits of reviewing and switching mortgage deals, particularly for those currently on SVRs.
Experts from Mojo Mortgage outlined what these benefits could end up being.
Benefits of switching mortgage deals:
- Predictable monthly payments for those on a fixed rate which makes it easier for them to budget
- Protection against potential interest rate rises
- Potential interest savings by switching from an SVR to a lower fixed-rate mortgage
- Better peace of mind.
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Millions of homeowners are facing soaring mortgage costGETTY However, the analysts also cautioned there are also certain factors that homeowners need to be aware of when considering any changes.
These include:
- Early Repayment Charges which can range from one per cent to five per cent of their outstanding balance if they leave their current mortgage early.
- The length of time mortgage holders plan to reside in the property
- Arrangements fees which can be over £2,000
- Getting advice from a mortgage broker