moneysupermarket.com warns SVR mortgage holders

Date:Friday 21st August 2009
Author: Susanna Kavka

Standard variable rate (SVR) mortgage holders are not making the most of the current low base rate, says moneysupermarket.com.

With the interest rate currently set by the Bank of England at only 0.5 per cent, those on SVR mortgage deals are seeing low monthly payments.

But the comparison site claims these people should not see the savings as extra cash in their pocket.

Hannah Skenfield, mortgage channel manager at moneysupermarket.com, commented that people can use this money to pay off more of their mortgage by switching to capital repayments.

She said: "The borrowers really taking best advantage of low rates are those using the opportunity to repay more of the outstanding debt on their home."

Research from the website showed that 23 per cent of mortgage holders in the UK are on interest-only mortgages.

Earlier this week, the site reported that the disparity between the highest and lowest average mortgage rates on offer from different providers has grown to 2.5 per cent this year, compared to 0.93 per cent last year.