Switching mortgages 'could be a good idea'

Date:Wednesday 6th January 2010
Author: Max Freedman

Changing to a different mortgage deal could be a good idea for those borrowers who still have a large sum to pay off on their loan, according to moneynet.co.uk.

The financial advice website stated that, as some small building societies are increasing the rate of their Standard Variable Rate (SVR) loans to as much as 5.99 per cent, hunting for a new deal could mean large savings.

Changing from a 5.99 per cent deal to the 4.75 per cent SVR product offered by Leeds Building Society, for example, could mean savings of up to £1,572 in the next five years.

However, for homeowners who are nearing the end of their mortgage payments, changing to a different deal may not mean any particularly large savings and would save them the time and money, especially when fees are taken into consideration.

For first-time buyers, the return of the stamp duty tax will be an additional unwelcome cost and a short-sighted move by the government, according to Andrew Hagger from moneynet.co.uk.