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How to give yourself the equivalent of a monthly pay rise

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Written by: Adam Lewis
06/10/2016
Borrowers on Standard Variable Rate (SVR) mortgages, or those coming to the end of an existing mortgage, could save nearly £1,500 a year on their repayments if they switch to a new fixed rate deal.

According to Legal & General Mortgage Club’s analysis of 2-year and 3-year fixed rate mortgage data, average rates have fallen 0.2% since the start of 2016.

This has largely been fuelled by the Bank of England’s decision to lower the base rate to 0.25% in August, which was preceded by lenders pricing in the cut by reducing SVRs and fixed rate mortgages to record low levels.

However, despite some reductions in SVRs, Legal & General said around half of lenders have failed to pass on the change to their variable rate products.

“Borrowers on an SVR or coming to the end of their existing mortgage have the potential to save thousands of pounds on their mortgage, the equivalent of a monthly pay rise or a family holiday at half term,” said Jeremy Duncombe, a director at the Legal & General Mortgage Club.

However, in spite of the great deals available, Duncombe said the unpredictable and complicated nature of the mortgage market can make the idea of switching mortgage a daunting task for many borrowers.

How to save by remortgaging

It’s worth checking to see the possible savings you can make by remortgaging. Here are some top tips from comparison site Money.co.uk:

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