Moneysupermarket urges SVR borrowers to switch

With a number of building societies increasing their SVRs, many borrowers on deals are now considering whether they should remortgage.

Hannah-Mercedes Skenfield, mortgages channel manager at Moneysupermarket, said that the remortgage market is now open for business after being closed since the start of the credit crunch.

He added: "Most borrowers on SVRs had been enjoying a better rate than that on offer to new borrowers and the increasing of LTV criteria meant people could not remortgage anyway. Over the last month or so we have seen the market shift. SVRs have increased, rates for new borrowers have been falling and we have seen an increase in the availability of mortgages even at higher LTVs."

Traditionally, one barrier to people moving off an SVR deal onto a fixed or tracker rate mortgage is the arrangement fee involved. However Moneysupermarket figures show that the best two-year fixed-rate mortgage, with fee included, is First Direct's fixed rate 3.29% deal with a £998 fee.

For those considering a tracker mortgage, Moneysupermarket figures show that, taking the arrangement fee into account, the best deal is Alliance & Leicester's two year offering, which currently stands at 2.49% with a £995 fee.

Taking into account the initial arrangement fee, the actual cost of this mortgage would have an equivalent rate of 3.07%- which beats all but seven SVR deals currently available.