How good is your mortgage lender?
Will your lender play fair when your current deal comes to an end, or rip you off by moving you onto a ridiculously high rate?
If your special rate deal is about to come to an end, and you’re looking for a new mortgage you can’t fail to notice that the very best rates are still reserved for borrowers with a lot of equity in their homes.
If you’re starting to think your lender’s standard variable rate (SVR) mortgage is probably the best you can do, don’t despair.
Luckily, the SVR is no longer the terrible demon of the mortgage market it once was. After a string of base rate cuts, excessively high SVRs are long gone. This means borrowers who don’t – or can’t – remortgage at the end of their special rate deal, won’t be stuck with an ultra-expensive home loan. And thank goodness for that!
These days, SVRs are pretty competitive compared with the rest of the mortgage market. Take Lloyds TSB and Nationwide, for example, which have hard-to-beat SVRs of just 2.5%. In fact, many SVRS nowadays are exclusive, and only available to existing borrowers who are coming to the end of a special rate deal.
What if the SVR isn’t for me?
That said, what happens if you don’t want to be on the SVR? What if you’d prefer the peace of mind that comes with a fixed rate mortgage? Or, you like the idea of taking your chances with a tracker instead?
If you can’t remortgage because you don’t have enough equity in your home, what are your options?
Some lenders have a range of special deals which are open to existing borrowers exclusively. But many are not worth bothering with – it really depends on the lender.
Let’s take a look at five of the big players:
Abbey
The good news is Abbey are prepared to offer special rates to existing borrowers with a high loan-to-value (LTV) of 95% and over. That means, if you have equity in your home of 5% or less, you’ll still qualify. But the bad news is, although a range of fixed and variable rates are available, the lender won’t disclose what those rates might be because that depends on each borrower’s individual circumstances.
By Jane Baker
