Households cash in on switch to SVRs

Almost two million homeowners who have moved off a fixed rate on to their lender’s variable mortgage are paying an average of £2,600 less a year.

More than half of the borrowers now on standard variable rates (SVRs) have more than 10 per cent equity in their home and could remortgage to a competitive deal if they wanted to. But with interest rates still at rock bottom, some 1.8 million borrowers whose fixed rates have expired are paying £2,600 less than they were, according to the Council of Mortgage Lenders.

It estimates that even if interest rates rise next year, 85 per cent of borrowers on SVRs would still be paying less than on their fixed-rate mortgage.