According to research released by Tesco Bank, up to 2.5 million home buyers may be paying hiked mortgage payments as a result of falling onto lender SVRs.
The firm says the average monthly SVR is around 4.39 per cent, while the average two-year fixed rate for vanilla prime customers is 1.95 per cent but what about customer’s that don’t meet this criterion?
How many of these customers though feel like they are stuck on their SVRs due to changes in employment, circumstances or credit hiccups and are unaware of specialist first charge mortgages that could save them £1000s of pounds a year.
Masthaven’s specialist first charge mortgage rates start from just 2.94% for prime customers while their adverse range from 3.34% to 4.54%. Someone who has missed two mortgage arrears in the past two years can get a rate of just 3.84%a at a LTV of 75% putting it well below the average SVR.
One of the major issues that customers stuck on SVR’s face is that finding information about specialist mortgages is difficult for them to access. There is no doubt that comparison websites have utilised massive marketing budgets to dominate the personal finance market but these sites don’t accommodate the millions of people that don’t fit the high-street lender’s criteria. When looking for a remortgage the top comparison all use the same search engine that doesn’t give you the option to search for a specialist mortgage and instead point you towards their chosen financial advisor if your profile is 100% vanilla.
More needs to be done to make customers aware of what financial products are available to them and the benefits of speaking with an IFA.