It is highly likely that interest rates will rise over the next few months.
Some customers on a Standard Variable Rate (SVR) are currently paying up to 6%, compared with the best mortgage deals (as of October 2017) at less than 2%.
SVRs will become even more costly if, as widely speculated, the Bank of England hikes the base rate in an effort to tame soaring inflation.
To see if you could save on your mortgage, VouchedFor (the UK rating and review site for mortgage advisers) are offering Boring Money readers a Free Mortgage Review with a whole of market mortgage adviser.
To better illustrate the issue, the average Standard Variable Rate is currently 4.37%*, two or three times higher than the best fixed mortgage rates.
So, someone on the average SVR is paying 2.26% more than the 2.11% deals currently available as a fixed 5 year rate for people with 15% equity in their property.
Someone with a slightly bigger stake of 25% could pay as little as 1.74% - and would be protected against interest hikes until 2022.
To put this into pounds and pence, someone with a £150,000 mortgage with 20 years to run on a typical 4.37% SVR will pay £939 per month, yet moving to 2.11% (based on an 85% LTV), the repayments would be just £767 - that’s £172 less per month and a saving of a staggering £10,320 over five years.
One of the biggest issues for many borrowers is that they are baffled by the thousands of products on offer.
Many simply don’t know where to start when it comes to getting the best mortgage deal (particularly as popular comparison sites don’t show you every available deal or work out the full cost, including fees, of each deal).
With so much choice and a confusing array of interest rate and fee combinations, people are understandably scared of making the wrong decision.
As a result, many end up doing nothing whilst paying far more than they need to.
Alex Whitson, Director of the Independent Financial Adviser review website VouchedFor.co.uk said: “By speaking to a whole of market mortgage adviser customers can find the lowest cost mortgage to suit their specific circumstances and save a big chunk of money each month as a result."
Whitson added: “It’s important to weigh up all the mortgage costs before signing up - a two year fixed rate close to 1% may look appealing but if it comes with a £1,500 product fee for a short term 2 year deal it may not be the best decision."
VouchedFor are currently offering Boring Money readers a Free Mortgage Review with one of the highest rated mortgage advisers listed on their site. The adviser will search the whole of the market to tell you if you could save on your mortgage and reveal the best deals available to you.
*Source: Moneynet 2017