Homeowners 'spoilt' by low interest

Homeowners are getting used to low interest rates and could be missing out on some of the best cheap mortgages for years, it has been claimed.

According to research by unbiased.co.uk, 37 per cent of homeowners are now on their mortgage lender's Standard Variable Rate SVR, an increase from 35 per cent from January 2011.

The average rate homeowners would now be willing to fix at is 3.4 per cent, a reduction from the 4.0 per cent seen in January 2009.

Furthermore, 46 per cent have not reviewed their mortgage since March 2009 and so have no idea what cheap mortgages they may be missing out on.

"Once rates begin to rise so will the price of fixed rates, meaning that now could well be the perfect time review their mortgage finances and move to guard against the potential of increased payments in the future," explained Karen Barrett, chief executive of unbiased.co.uk.

Analysis by Homeloan Management Limited also warned that negative equity will increase along with the base rate.

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2011-09-21 13:16:38 © Moneyextra.com