Quarter of mortagage 'SVR'

Really2

http://www.google.com/hostednews/ukpress/article/ALeqM5gxi1QGJm_TdJc6Gb1ZS-v2GBzoOw

Nearly a quarter of homeowners are currently on their lenders' standard variable rate (SVR) as record low interest reduce the incentive to remortgage, research has shown.
Around 27% of people with a mortgage, the equivalent of five million homeowners, are on an SVR, the rate which people automatically revert to when their existing deal comes to an end.

Looks like they won't be jumping ship until rates go up or fixed rates come down.

Fairly sensible to me if you have the equity there is no hurry as any rate increases are a bit of yet. And for certain they will not be going up 1%, 2%,3% etc overnight.
It will be gradual .25's or even .5% max if growth/inflation is fast (I don't see the latter)

Max_Headroom_3

A good friend of mine (The Blonde actually) has gone onto SVR recently, and as you say, there isn't much incentive to change from that despite having had a look around.

Graham_Devon

I doubt many of them (including myself) will actually be ABLE to jump ship when they feel the need to.

Many homeowners (and more and more will find themselves on SVR in the coming months and years) will simply be stuck on them.

Enjoying low rates like I am now, is fine. But you can't just jump onto something else when the rates go up. I'm personally aware of this. I doubt many in the country all enjoying the lowest rates ever will be thinking of fixing now, before they go up, as they would have to fix for more than they are currently paying.....plus, they'd have to jump through the hoops of getting mortgages now, and pay whats probably a huge fee for the privelege.

chucky

Really2 wrote: »

http://www.google.com/hostednews/ukpress/article/ALeqM5gxi1QGJm_TdJc6Gb1ZS-v2GBzoOw

Nearly a quarter of homeowners are currently on their lenders' standard variable rate (SVR) as record low interest reduce the incentive to remortgage, research has shown.
Around 27% of people with a mortgage, the equivalent of five million homeowners, are on an SVR, the rate which people automatically revert to when their existing deal comes to an end.

Looks like they won't be jumping ship until rates go up or fixed rates come down.

Fairly sensible to me if you have the equity there is no hurry as any rate increases are a bit of yet. And for certain they will not be going up 1%, 2%,3% etc overnight.
It will be gradual .25's or even .5% max if growth/inflation is fast (I don't see the latter)

if this right that only 27% are on SVR's it blows the argument that when rates increase there will be lots of forced sellers and that the low mortgage rates are masking many issues...

ILW

chucky wrote: »

if this right that only 27% are on SVR's it blows the argument that when rates increase there will be lots of forced sellers and that the low mortgage rates are masking many issues...

I believe many more are on trackers.

chucky

ILW wrote: »

I believe many more are on trackers.

true - good point...

at the start of the year 40% were on fixed rates.
was very surprised at the 27% number

Graham_Devon

chucky wrote: »

if this right that only 27% are on SVR's it blows the argument that when rates increase there will be lots of forced sellers and that the low mortgage rates are masking many issues...

I dunno.

People have been remortgaging over the last few years with ease, hence the lowish numbers on SVR's.

But most of those remortgaging deals had a short life....where you would then look around for the next remortgage deal.

Plus you have those on trackers, which will rise in line with rates.

Remortgaging now, isn't quite so easy, so plenty will have their existing deals still going, but about to fall off onto SVR sometime in the future.

It's whether they can then remortgage again, in a completely new economic climate that could be the problem.

The competition through lenders to remortgage (even phoning you up as they did me!) has meant a lot of people did just that. But their current fixes will end sometime. And theres no lenders ringing me anymore, or sending me gumph in the post telling me I can get a better deal.

chucky

Graham_Devon wrote: »

I dunno.

People have been remortgaging over the last few years with ease, hence the lowish numbers on SVR's.

But most of those remortgaging deals had a short life....where you would then look around for the next remortgage deal.

Remortgaging now, isn't quite so easy, so plenty will have their existing deals still going, but about to fall off onto SVR sometime in the future.

It's whether they can then remortgage again, in a completely new economic climate that could be the problem.

it was my mistake Graham that i didn't include trackers or even offsets in there.

40% were on fixed rates at the start of the year - which i think is higher now so there seems to be quite a few on trackers it seems. trackers are the most profitable for banks at the moment...

it shows that those on SVR's may be on them due to lack of options due to NE or lack of mortgage products for them.

Really2

Graham_Devon wrote: »

Enjoying low rates like I am now, is fine. But you can't just jump onto something else when the rates go up.

You can if you have the LTV, Most will have.
That is why I said if you have the LTV it it is quite sensible.

Graham_Devon

Actually, just reading the story, it says what I have just said...

But many homeowners are likely to be sticking with an SVR because they would struggle to remortgage in the current market.

Since the credit crunch first struck, lenders have been demanding increasingly high deposits, with many asking for equity stakes of 40% in order for people to qualify for their best deals.

However, house prices falls of more than 20% have left many people with little equity in their property, and as deals for those with just a 10% or even a 5% deposit have become increasingly scarce, many homeowners have little choice but to stay on their lenders; SVR.

David Elms, chief executive of Unbiased.co.uk, said: "There are a large proportion of homeowners out there who think that sitting on their lender's SVR is the best solution for them. We have gone through a period of falling base rate, making SVRs suddenly an attractive option compared to many fixed rate deals. Those remaining on SVRs need to stay alert and once the base rate starts to rise again and the market improves, ensure they act fast to secure a new deal which they can rely on not to suddenly rocket in monthly payments."

HAMISH_MCTAVISH

chucky wrote: »

it shows that those on SVR's may be on them due to lack of options due to NE or lack of mortgage products for them.

That and some SVR's are actually as good as the best tracker deals now available.

Base rate + 2% for Lloyds/C&G customers.