Interest rate rises since 2003 have seen mortgage repayments for homeowners on Standard Variable Rates jump by more than £750 a year, according to mform.co.uk
The online mortgage search firm also says more rises will increase payments further and encourages people to move to a mortgage deal with a lower rate.
According to mform.co.uk, at the end of 2003 there were almost four million mortgages on SVRs.
It claims since then, due to interest rates rises, many of those still on SVRs will have seen repayments rise £750 a year.
Francis Ghiloni, mform.co.uk business development director, says: “SVRs with the major lenders are generally around 2% above the Bank of England base rate.
“So, unless you need the flexibility offered through a SVR such as the overpayments that you can make it is unusual that you would choose a mortgage charging that rate and borrowers should be wary about remaining on them.
“With the Bank base rate expected to rise further, those mortgage holders paying SVRs should reconsider their position and decide whether they would be better off with a lower rate.
“However there is an argument that borrowers could benefit from variable rates if the Bank of England rate peaks at 5.75% and then falls back. There may be some benefit in considering either a short-term fixed rate or a low variable rate.”
The SVR is the basic interest rate on which mortgage lenders base all of their mortgage deals, and usually the rate customers move to at the end of a special deal.
However, the SVR tends to be considerably higher at around 7.5% than a lender’s most competitive deal available.
According to mform.co.uk, the average SVR in 2003 was 4.19%, but by March 2007 it had risen to 6.15%.
It says if the estimated £148bn of mortgage money paying SVRs in 2003 was still linked to these, it would mean an increase in repayments of around £2.886bn a year or £759.47 per mortgage holder.
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