SVR mortgages 'right for some'

25-Apr-2007

In news which may be of interest to would-be first time buyers, standard variable rate mortgages (SVR) may make more sense for some borrowers, an expert has claimed.

According to Julia Harris, a mortgage analyst at Moneyfacts.co.uk, borrowing at a lender's SVR may be appropriate for borrowers - which may include first time buyers - who would find expensive any fees associated with switching products.

Furthermore, any borrowers with small balances may find it difficult to transfer their mortgage as less than 50 per cent of lenders will provide funds for a mortgage loan under £15,000.

"It is frequently reported that too many borrowers remain on a lender's standard [rate,] paying over-inflated rates of interest on their mortgage, but for some borrowers it may not be in their interests to switch," said Ms Harris.

"There are borrowers who will find it more expensive to switch lenders, even if the rates are substantially lower," she added.

To find out about those mortgages specifically aimed at first time buyers, see our best buys for first time buyers table.

Moneyfacts.co.uk provides comparisons on a number of products, including credit cards and pensions.

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