Keep Track of Your Mortgages to Avoid the Dreaded Standard Variable Rate
About two years ago I lost a file with the dates when my mortgage deals would come out of their special rates and onto the lender’s dreaded “standard variable rate.”
I forgot all about it and a year later I got letters from two of my mortgage lenders that went like this: “Dear Mr. Lawrenson, the special discount deal you took out three years ago is coming to an end, so we are now delighted to tell you that you will now go on to our "special" standard variable rate with effect from the next monthly payment.”
Oh dear. For the one mortgage, the standard variable rate (SVR) was 1.75% above the Bank of England base rate. For the other it was 1.5% above base rate.
Of course, no one with any sense pays these rates.
So, of course, I was back in the market for another decent deal but because I hadn't planned ahead, I ended up paying the SVR for a month .
In both cases, I ended up remortgaging for the same amount with the same mortgage lender but with a much more favourable rate for another three years.
Of course, now, I’ve got to remember to switch again three years hence! And this time I have backed up the file and written a reminder in big letters on my wall!
Copyright: David Lawrenson 2007
I forgot all about it and a year later I got letters from two of my mortgage lenders that went like this: “Dear Mr. Lawrenson, the special discount deal you took out three years ago is coming to an end, so we are now delighted to tell you that you will now go on to our "special" standard variable rate with effect from the next monthly payment.”
Oh dear. For the one mortgage, the standard variable rate (SVR) was 1.75% above the Bank of England base rate. For the other it was 1.5% above base rate.
Of course, no one with any sense pays these rates.
So, of course, I was back in the market for another decent deal but because I hadn't planned ahead, I ended up paying the SVR for a month .
In both cases, I ended up remortgaging for the same amount with the same mortgage lender but with a much more favourable rate for another three years.
Of course, now, I’ve got to remember to switch again three years hence! And this time I have backed up the file and written a reminder in big letters on my wall!
Copyright: David Lawrenson 2007
This entry was posted by lettingfocus, on
Monday, February 05, 2007.
