Don't get caught out

To avoid increasing payments, borrowers whose mortgage deals are due to expire are encouraged to act fast by seeking the advice of a mortgage adviser.

The Times recently reported that thousands of mortgage borrowers whose mortgage deals are coming to an end this month risk a sharp increase in their monthly repayments if they do not act fast. The discounted loan deals that are coming to the end are worth a total of about £22.3 billion which is double the amount of the previous month. Unless these borrowers act with speed, they will be automatically switched onto their lender's standard variable rate (SVR) and as a result, suffer an increase in their monthly repayments, unless they decide to remortgage.

According to Moneyfacts, the average SVR is 4.24 per cent, compared with a typical remortgage deal of 1.93 per cent. If you are switched to a standard variable rate, this will have a severe impact on your monthly repayments. A homebuyer with a £400,000 mortgage on the SVR would be about £485 worse off each month, £5,796 over a year, than a homebuyer who seized the cheaper rate.

Despite homeowners having the opportunity to save themselves a lot of money, a surprisingly large number of borrowers will fail to transfer, either out of apathy or believing that SVR's are their only option.

Those who remortgage, stand to benefit from mortgage price wars. With limited demand for mortgages, lenders are competing for a smaller number of customers which means that lenders are offering competitive product transfers to clients, who, not so long ago, would have been forced to move elsewhere to get a cheap rate when their loan terms expired.

If your mortgage deal is due to expire, we would recommend that you get in contact with us to ensure that you do not get caught out.