Around three million home owners are being penalised by lenders, as they are refused the cheapest mortgage deals.
A study conducted for Money Mail found that savings of £3,000 are being lost by home owners, as banks are refusing to let them have the cheapest deals available. This is leaving millions of home owners paying the Standard Variable Rate, which is an average of 4.59%, in comparison to the best rate being offered at 0.89%. The best deals are being offered to those who have a minimum of 35% equity in their homes.
Borrowers are finding that they are being rejected for the best deals for a variety of reasons, including deposits not being large enough, the wrong loan type or being too late with their application.
A mortgage price war was initiated last month, when Yorkshire Building Society released a new record low deal with a rate of 0.89%. Some of the deals being offered are only available for eight days before applications are being refused.
Critics are calling for lenders to make cheap deals available to all borrowers, including those who are less wealthy and would benefit from a low rate deal. According to the latest figures, if a borrower on a Standard Variable Rate was given a low rate deal, they would save £3,396 a year, based on a mortgage of £150,000.
Mortgage advisers study on CeMAP training courses so that they can help buyers to find the best deals.
