Wrong mortgage can cost £1,000s
Heywoods is warning homebuyers to look behind the window dressing of introductory mortgage offers, after new research revealed that some borrowers are paying thousands more a year once their mortgage reverts to the standard variable rate (SVR).
The Newcastle-under-Lyme estate agency urged borrowers to read between the lines and compare not only the fixed introductory rates on offer, but also each lender's standard variable rate.
The company, which also provides a mortgage advice service, said that hard-pressed borrowers understandably wanted the best introductory rate possible.
However, it added, there were also staggering differences in SVR between lenders, which meant that many borrowers would end up paying thousands more in the long run.
Figures just released by moneyfacts.co.uk show that the difference in repayments can amount to as much as £5,700 a year on a £150,000 home loan between the least and most competitive SVRs.
The lowest SVRs are currently around 2.5%. Yet other lenders, typically small building societies, are hitting customers with standard variable rates of anything up to £6.45%.
Heywoods said that customers with little equity had less scope to shop around, making them the most likely to get caught out by higher SVRs.
The estate agent is urging house-hunters to take independent advice that is readily available in store at the Mortgage Advice Bureau.