The latest word on the street is that mortgage owners who are on standard variable rates will be pushed to tipping point when the base rate eventually rises. Take a look at these best buy mortgages to switch to a more competitive deal.
According to Which?, as reported on the BBC, banks and building societies could do more to prevent mortgage owners stay on top of their mortgage repayments.
Their research revealed 40 percent of Brits with a mortgage are now on a standard variable rate as they have been unsure about which mortgage to switch to after their cheap introductory mortgage deal expired.
While many have been enjoying a long period of low repayments due to the base rate remaining at 0.5 percent, homeowners are being urged to compare the market to prevent them from getting out of their depth when this rises.
The highest standard variable rate mortgages which some consumers have fallen back on are double the cost of some of the best mortgage offers currently on the market, so take a look at the offers below to see if you could save money on your repayments.
Fixed Rate Mortgages:
ï The Royal Bank of Scotland is offering one of the best fixed rate mortgage deals on the market at the moment.
For the first two years the rate is 2.75 percent, and subsequently this rises to 3.90 percent APR typical variable for LTV 60%.
ï Hanley Economic Building Society also has a competitive offer of 2.95 percent for two years fixed, with a LTV of 75 percent. Following these two years, the APR typical variable is 5.10 percent however.
ï If you do not want to be tied in for two years then the Flexi one year mortgage offer from Yorkshire Building Society is another best buy. To be eligible, mortgage owners need a 75 percent LTV, and after that one year period, the APR typical variable rises to 4.90 percent.
ï Halifax is also worth a mention here, as their two year offer for 60 percent LTV mortgages entitles borrowers to an initial interest rate of 2.99 percent for this introductory period.
After these two years the rate increases to 3.60 percent APR typical variable.
Capped Rate Mortgages:
These types of mortgages act in a similar way to variable rate mortgages, except they are capped so the mortgage owner knows they will never have pay interest over a certain level.
While homeowners do not get the same consistency as with a fixed rate mortgage, there are some good deals to be had with capped rate mortgages.
Cheltenham & Gloucester for example are offering 0 percent interest for 12 months on their three year fixed LTV 60 percent mortgage. After this period the interest rate is capped at 3.0 percent APR typical variable.
Variable Rate Mortgages:
If you want to take the risk that the base rate will remain low for a considerable time yet, and it may well do, then a variable rate mortgage could be your best bet.
Cumberland is offering a variable rate mortgage at 1.89 percent above the base rate ñ for those with a LTV 75 percent. This offer ties the mortgage owner in for three years however.