SVRs 'could cost £2,550 extra every year'

Borrowers who opt for standard variable rate (SVR) mortgage deals may be paying over the odds by as much as £2,550 a year, new research from mform.co.uk has suggested.

The online mortgage company has said that while SVRs can provide a degree of flexibility for some borrowers, rates available vary by as much as 1.7 per cent, ranging from 6.24 per cent to 7.94 per cent.

With two fifths of borrowers having never changed mortgage lender, mform has said that it is vital for more Britons to consider changing their habits, and thus their mortgage deals, if they want to save themselves money.

"Borrowers with a typical £150,000 home loan on the lower SVRs could save nearly £212 a month compared to those on the most expensive SVR deal," said Francis Ghiloni, marketing and business development director at mform.co.uk.

"Borrowers ought to be wary of SVRs. However in some cases the flexibility offered can be attractive, particularly where the rate is competitive," Mr Ghiloni added.

Last week Standard Life announced that it was raising its SVR by 0.15 per cent to 7.46 per cent.

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