According to online mortgage broker Trussle, otherwise, they may end up rolling onto their lender’s expensive standard variable rate (SVR) and see bills rocket more than £4,000 a year
Homeowners whose mortgage deal is due to end in the next three months are being warned to act now due to coronavirus delays.
Otherwise, they could end up rolling onto their lender’s expensive standard variable rate (SVR) and see bills rocket more than £4,000 a year, according to online mortgage broker Trussle.
Mortgage lenders are currently inundated with requests from borrowers applying for a payment holiday on their loans due to the impact coronavirus has had on their finances, which may cause delays for other customers.
Research by Experian for Mail on Sunday shows that up to 44 per cent of borrowers are likely to end up on their provider’s SVR in the coming months as a result.
These are typically more expensive than fixed-rates and homeowners could save hundreds of pounds a month by switching.
And even though the Bank of England has slashed the base rate to a record low of 0.1 per cent, it’s not been reflected in the SVR deals offered by most lenders.
Latest figures from Moneyfacts.co.uk suggest that the average SVR is set at 4.75 per cent – four times more than some of the best deals on the market.
But porting mortgages may also be delayed due to current lockdown rules which make it almost impossible for lenders to carry out physical property valuations.
The coronavirus crisis has caused some lenders to impose extra restrictions on what it offers borrowers.
In recent weeks, the total number of mortgage products available has been cut from 5,22 to 3,637, according to Moneyfacts.co.uk.
One Savings and Vida Homeloans have temporarily stopped operating altogether, while Nationwide has limited the amount it will lend borrowers applying online or through a broker to 75 per cent.
Yorkshire Building Society has also capped remortgage loans to 85 per cent, and says it can’t offer loans for new-build homes or those worth more than £1million while it’s unable to carry out a physical valuation.
If you’ve already started the remortgaging process then you’re advised to track its progress with your lender.
David Hollingworth from broker London & Country said that homeowners in need of high loan-to-value deals are most likely to be affected.
He said: There are ways to value from a distance, using Street View and other data on local valuations but it will depend on individual lenders whether this will be enough. If your deal is due to come to an end within the next three to six months, it would be good to start looking around now.
You can find out what your bank is doing if you’re in need of a mortgage holiday.
You can also ask for breathing space from your credit card or loan provider if you can’t make the repayments due to coronavirus.
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