As at 29th June 2019
Headline Market Statistics
34% of mortgage holders have been automatically moved onto a standard variable rate (SVR)
55% of mortgage holders remortgage with their existing provider for simplicity’s sake, even though it is rarely the best value
More than two million homeowners are sat on SVR rates, with the difference between the average SVR and a typical competitive deal being 2.0%
More than two million homeowners are sat on these rates, with the difference between the average SVR and a typical competitive deal being 2.0%, equivalent to a difference in interest payments of £2,620 a year by not switching.1
Many of these people are ‘between deals’ but pay a steep price for not switching immediately. A third (34%) of mortgage holders have been moved onto a standard variable rate (SVR) automatically, with exactly half having done so in the last twelve months – equivalent to more than a million mortgage holders falling off a rate ‘cliff edge’.2
It typically takes these homeowners a little over three months to move from an SVR to a new deal once their fixed-rate deal has expired, costing them an average of £625 in overpayments during the interim period as a result.
Over half (55%) of remortgagers make this mistake, settling for a new deal offered by their current provider for simplicity’s sake, while a similar number (49%) said they settled for a deal just to ‘get it sorted’.
Total gross annual mortgage overspend was calculated by applying the difference between paying the average SVR rate (4.29%) and paying a competitive rate based on the average top tier 2-year fixed mortgage (2.29%) on the average mortgage balance of £131,000. This difference £2,620 applied to the number of SVR mortgage holders (2,012,421) = £5.275bn.
Of the 8,097,000 mortgages held, if 34% have been moved onto an SVR automatically (2.75m) and half of these in the last year, that’s 1.4 million mortgage holders experiencing this each year.
Market research: Sources for mortgage data includes UK Finance (no. Of SVR mortgages and total mortgages), Bank of England (average SVR), Moneyfacts (average competitive 2 year fixed mortgage product),
Opinium conducted a poll of 2,009 UK adults (national representative) between 24 -28th May 2019.
1.86 million mortgage payment holidays have been issued which is equivalent to 1 in 6 mortgages
There are currently 10,970,000 outstanding first charge mortgages in place in the UK as at 28th May 2020, meaning the mortgage payment holidays in place account for 17 per cent of total mortgages or slightly over one in six.
Figures relate to the total first charge mortgage market, grossed up from a representative sample up to 28 May 2020. The figures include both residential and buy-to-let mortgages, and may be subject to modest revision as firms identify double-counting and other anomalies in previous daily totals.
The above research has been obtained from UK Finance, who represent more than 250 firms across the industry.