25 Sep 2017

Are you paying £300 too much for your mortgage every month?

Are you paying £300 too much for your mortgage every month?

UK home buyers may be over-paying on their mortgage by almost £300 every month, according to new research.

Analysis of the mortgage market by Tesco Bank has found that up to 2.5million people have slipped onto higher standard variable rates at the end of a fixed-rate period.

The bank added that, with the typical standard variable rate at 4.39% compared to the average two-year fixed rate at 1.95%, these customers could be over-paying on their mortgage by up to £274 a month.

In addition, the bank's research revealed that, while 62% of prospective home buyers are optimistic about their housing prospects, 33% are more pessimistic - citing economic uncertainty, budgetary pressure, and the prospect of future interest rises as key concerns around purchasing their first home or moving house. 

'Reliant on family'

The bank's study also showed the so-called Bank of Mum and Dad is more relevant than ever.

Almost one-fifth of UK home buyers over 40 are still relying on family help to buy a home and typically receive more than £50,000 from their family.

More than half of over 40s were given this financial support as a gift, while almost a third received it as a loan.

Out of all the age groups surveyed, under 30s were the most likely to require assistance from their family to buy a home, with almost three-fifths receiving this support.

Regionally, home buyers in the London area were most likely to depend on financial assistance from their family to buy their home, getting more than £63,000 on average. 

The research found that the average deposit for UK home buyers now exceeds £61,000. Those in the south-east of England are typically making the largest down payments on their home, at an average of over £107,000.

Mortgage experts

With mortgage rates at record lows, many people can save substantial sums of money each month by remortgaging.

Our independent mortgage advisers can do the hard work for you and shop around for the best deal.

To find out how we could help you, click here.

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