The Top 10 Tips For Selling Safely Online
3 Essential Tips When Looking For Property To Rent
3 Great Benefits Of Private House Sales
3 Ways To Make The Property Market Work For You In 2012
London Property Guide for 2012
Home owners are now having to pay additional costs after their initial mortgage period ends as lenders are taking advantage of the difficulty in getting new loans right now. According to an article and research done by the Daily Telegraph newspaper, banks are making money on home owners’ woes. They are refusing to lower interest rates for borrowers after the current deal ends, typically with a standard variable rate mortgage.
The standard variable rate (SVR) is that interest rate the loan reverts to after the initial rate period, and in many cases it is much higher. Currently, nearly one third of all lenders have an SVR of five percent or higher. The Bank of England interest rate is 0.5 percent, and most initial rates in a variable mortgage loan are near that amount.
After the initial period, the rate rises, and the research shows that the difference between the Bank of England’s interest rate and the average SVR is over 4 percent. At the end of 2007 the difference was 1.72 percent, and today it is 4.12 percent, according to Moneyfacts. On a £150,000 mortgage, borrowers can save £335 a month by paying the lowest SVR, approximately 2.5 percent, and the most expensive SVR, which is currently 6.45 percent.
When credit was easier to obtain, borrowers often would renegotiate a new loan that had a lower rate and keep paying. But now, with credit very tight, lenders are not renegotiating the loans for many, and collecting the higher interest rates instead. When looking for a loan, it is important that borrowers know the rates and what they will be required to pay in all scenarios when the initial period is up.
© Housing Market News by The Little House Company
Property For Sale
The Little House Company has thousands of homes for sale from all over the UK direct from the owners find property for sale
