Homeowners nearing the end of their mortgage business could reduce their monthly mortgage repayments and enter into a new mortgage agreement as mortgage rates have fallen to record lows in the past 12 months. Now there are several sub-1% deals in the two-year fixed rescheduling plan, meanwhile in the Five year chart the lowest rate is only 1.14%.
To give an idea of how much could be saved by entering into a new debt rescheduling deal, the average rate for a five-year fixed rate contract with a 60% LTV five years ago was 2.61% in June, while the average rate for one five-year fixed rate contract with an LTV of 60% that month was 1.81%. However, these are the average rates across all mortgage deals, not just the rescheduling rates. As such, a homeowner at the end of a five-year fixed contract will find that the five-year rescheduling table shows interest rates well below average.
Similarly, a mortgage borrower who signed a two-year fixed contract two years ago would have had an average mortgage rate of 2.03% in June at an LTV of 60%, while that month the average two-year fixed contract with an LTV of 60% 1, 61 was%. Here, too, the lowest two-year fixed-rate contract in the graph is significantly lower than the average mortgage rate of just 0.94%.
The drop in mortgage rates could cause homeowners to cut their repayments by hundreds of pounds each month simply by reposting a new, lower rate.
Meanwhile, homeowners who have already reached the end of their fixed rate contract and are now with their lender variable standard interest rate (SVR) could reduce their mortgage repayments even further by hitting a new deal. For example, the average SVR is currently 4.41%, which is significantly higher than most of the rescheduling rates on our two- and five-year fixed rescheduling charts.
