As pp said, all depends on the interest rate. 2 year fixed @ 1.2% or SVR at 5.24% Big difference.
I'm curious what is the most popular rate structure for morgage in the UK? What is SVR? Huge gap between 1.2% and 5.24%.
Normally you “fix” your mortgage interest rate for a period of time at the start (2 to 5 years, but can be as much as 10) and after that it moves to a variable rate which rises and falls in line with the Bank of England base interest rate.
There are lots of alternatives but that’s probably the most standard way of doing things.
As pp said, all depends on the interest rate. 2 year fixed @ 1.2% or SVR at 5.24% Big difference.
I'm curious what is the most popular rate structure for morgage in the UK? What is SVR? Huge gap between 1.2% and 5.24%.
As of now, anyone looking for a new / remortgage will be offered primarily a fixed or tracker rate. 90% of the best /cheapest new rates being offered are 2 year fixed. It will be interesting to see what last weeks base rate reduction will do because by nature the tracker rates will now be a lot lower but I cant see fixed rates dropping by 0.5%.
The only people really on an SVR nowdays will be older, long term borrowers who've not moved or re-mortgaged over the past 10-15 years, those with really small balances that means it's not worth the cost of changing or those now not able to change (change in circumstances/ income etc) - alhough recently the FCA have said anyone coming off a time limited rate have to be offered a new deal irrespective of whether their circumstances have changed & no income or affordability tests are applied.
SVR's range widely between the best (3.94%) to the worst (5.74%). 25 years ago virtually all borrowers were on the SVR and "introductory" offers were for FTB's as an incentive to get onto the property ladder. I remember finding out during the mid 1990's that The Halifax were offering 2 and 3 year deals to all their existing customers & all you needed to do was to write & ask to change over to one of them. No cost or valuations needed. This was really the start of where we are today. The pinnacle was just before the financial crash in 2008/9 where lenders were offering crazy deals. I've got clients on lifetime trackers of base +0.34% and even base +0.19%. One notable lender who since went bust offerred mortgages of 110%. No deposit needed & 10% on top to help with furniture, fees or a holiday...!!
As pp said, all depends on the interest rate. 2 year fixed @ 1.2% or SVR at 5.24% Big difference.
I'm curious what is the most popular rate structure for morgage in the UK? What is SVR? Huge gap between 1.2% and 5.24%.
As of now, anyone looking for a new / remortgage will be offered primarily a fixed or tracker rate. 90% of the best /cheapest new rates being offered are 2 year fixed. It will be interesting to see what last weeks base rate reduction will do because by nature the tracker rates will now be a lot lower but I cant see fixed rates dropping by 0.5%.
The only people really on an SVR nowdays will be older, long term borrowers who've not moved or re-mortgaged over the past 10-15 years, those with really small balances that means it's not worth the cost of changing or those now not able to change (change in circumstances/ income etc) - alhough recently the FCA have said anyone coming off a time limited rate have to be offered a new deal irrespective of whether their circumstances have changed & no income or affordability tests are applied.
SVR's range widely between the best (3.94%) to the worst (5.74%). 25 years ago virtually all borrowers were on the SVR and "introductory" offers were for FTB's as an incentive to get onto the property ladder. I remember finding out during the mid 1990's that The Halifax were offering 2 and 3 year deals to all their existing customers & all you needed to do was to write & ask to change over to one of them. No cost or valuations needed. This was really the start of where we are today. The pinnacle was just before the financial crash in 2008/9 where lenders were offering crazy deals. I've got clients on lifetime trackers of base +0.34% and even base +0.19%. One notable lender who since went bust offerred mortgages of 110%. No deposit needed & 10% on top to help with furniture, fees or a holiday...!!
As pp said, all depends on the interest rate. 2 year fixed @ 1.2% or SVR at 5.24% Big difference.
I'm curious what is the most popular rate structure for morgage in the UK? What is SVR? Huge gap between 1.2% and 5.24%.
As of now, anyone looking for a new / remortgage will be offered primarily a fixed or tracker rate. 90% of the best /cheapest new rates being offered are 2 year fixed. It will be interesting to see what last weeks base rate reduction will do because by nature the tracker rates will now be a lot lower but I cant see fixed rates dropping by 0.5%.
The only people really on an SVR nowdays will be older, long term borrowers who've not moved or re-mortgaged over the past 10-15 years, those with really small balances that means it's not worth the cost of changing or those now not able to change (change in circumstances/ income etc) - alhough recently the FCA have said anyone coming off a time limited rate have to be offered a new deal irrespective of whether their circumstances have changed & no income or affordability tests are applied.
SVR's range widely between the best (3.94%) to the worst (5.74%). 25 years ago virtually all borrowers were on the SVR and "introductory" offers were for FTB's as an incentive to get onto the property ladder. I remember finding out during the mid 1990's that The Halifax were offering 2 and 3 year deals to all their existing customers & all you needed to do was to write & ask to change over to one of them. No cost or valuations needed. This was really the start of where we are today. The pinnacle was just before the financial crash in 2008/9 where lenders were offering crazy deals. I've got clients on lifetime trackers of base +0.34% and even base +0.19%. One notable lender who since went bust offerred mortgages of 110%. No deposit needed & 10% on top to help with furniture, fees or a holiday...!!
Comments
but obviously depends on rate
That is about 2.8 % interest
https://www.moneysupermarket.com/mortgages/rates-table/first-time-buyer/?propertyValue=180000&mortgageAmount=150000&remainingTerm=25&repaymentMethod=Repayment&sortState=MonthlyRepaymentAmount
They'll ask you for the Value | Deposit | Term | Repayment Method as the minimum amount of info
Scroll down a bit. There's a mortgage calculator! You don't even have to visit any sites and you can play around with the interest rate.
The only people really on an SVR nowdays will be older, long term borrowers who've not moved or re-mortgaged over the past 10-15 years, those with really small balances that means it's not worth the cost of changing or those now not able to change (change in circumstances/ income etc) - alhough recently the FCA have said anyone coming off a time limited rate have to be offered a new deal irrespective of whether their circumstances have changed & no income or affordability tests are applied.
SVR's range widely between the best (3.94%) to the worst (5.74%). 25 years ago virtually all borrowers were on the SVR and "introductory" offers were for FTB's as an incentive to get onto the property ladder. I remember finding out during the mid 1990's that The Halifax were offering 2 and 3 year deals to all their existing customers & all you needed to do was to write & ask to change over to one of them. No cost or valuations needed. This was really the start of where we are today. The pinnacle was just before the financial crash in 2008/9 where lenders were offering crazy deals. I've got clients on lifetime trackers of base +0.34% and even base +0.19%. One notable lender who since went bust offerred mortgages of 110%. No deposit needed & 10% on top to help with furniture, fees or a holiday...!!