Tesco Bank says 2.5 million SVR customers ‘overpaying’

Money

Up to 2.5 million homebuyers may be paying hiked interest payments as a result of falling onto lender SVRs, according to Tesco Bank.

The firm says the average monthly SVR is around 4.39 per cent, while the average two-year fixed rate is 1.95 per cent.

Tesco Bank adds that these customers “could be over-paying on their mortgage by up to £274 a month”.

The firm says this is a problem because one-third of home buyers would need to reduce their spending if interest rates rose by 0.25 per cent.

Tesco Bank managing director David McCreadie says: “Our goal is to reward the loyalty of our customers.

“Our latest home buyers research illustrates that customers continue to face many challenges when buying a home and so we give them a little help by offering our competitive rates when their fixed rate term comes to an end.”

Earlier this year digital mortgage broker Trussle called for a ‘mortgage switch guarantee’ to tackle the issue of mortgage prisoners trapped on lender SVRs.

 

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