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Millions of UK home owners overpaying on their mortgage

According to research by Tesco Bank, around 2.5 million home owners are paying more than they need to on their mortgage.

This is due to being placed on the lender’s Standard Variable Rate (SVR), usually once a fixed rate deal has ended. The study reveals that the average SVR is 4.39%, while an average fixed rate deal is 1.95%. This means that customers may be paying £274 a month more than they need to. The Home Buyers research shows that if interest rates increase by 0.25%, a third of home owners would need to make adjustments to their discretionary spending.

The study also revealed that the number of potential home buyers who are confident about their prospects when buying a property, has fallen to 62%, a drop of 11% during the last six months. A third of potential home buyers remain pessimistic, citing the prospect of rising interest rates, budgetary pressure and economic uncertainty as barriers to buying a home, or moving.

The research highlights the difficulties faced by first time buyers. Nearly one fifth of buyers aged over 40 still rely on parents to help them purchase their own home, receiving an average of £50,000. Those aged below 30 are most likely to require support from parents to buy a home, with three fifths receiving help.

First time buyers do face challenges when they decide to buy a home, but CeMAP qualified mortgage advisors have the relevant knowledge to be able to help all buyers find an affordable mortgage.

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