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Lenders could make an extra £20.1m per month from unsuspecting mortgage customers who are coming off their mortgages and moving onto standard variable rates.

MoneyExtra.com says that while banks and building societies have dramatically cut savings rates to an average rate of 0.58%, the average SVR on mortgages is 4.66% above base rate, compared to only 1.9% per cent in Spring 2008 – which is a 145% increase in income in just 12 months.

Richard Mason, managing director of Moneyextra.com says: “This is blatant profiteering by our lenders, they are shoring up their balance sheets by charging huge rates for existing borrowers, but offering tiny rates to savers. While a lot of deluded customers have recently taken advantage of a reduction in their monthly mortgage payments, what they fail to understand is that the full benefits of the rate cuts are not being passed to them."

Six out of ten mortgage holders have expressed concerned about what will happen to them and their finances once their fixed deal comes to an end. Many feel like they do not where to turn and many more are simply confused by what is going on around them and their mortgage.

Talk to a mortgage adviser about your deal. Maybe you are paying too much on your SVR, maybe you could find a lot better fixed or tracker mortgage out there. Even if you are on the best rate you are likely to secure right now, it is still good to talk to someone who understands mortgages and can help you understand your situation better. Ignorance will only lead to abuse, so get smart and get informed about your mortgage situation today.

SOURCE: MoneyExtra.com, 04/06/09

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