Am I paying too much for my mortgage? How to find out in 5 minutes
Hundreds of thousands of UK homeowners are currently on their lender's standard variable rate - paying significantly more than they need to, often without realising it. Here is how to check whether you are one of them, what it is likely costing you, and exactly what you can do about it.
The silent cost of doing nothing
When a fixed rate mortgage ends, most lenders move you automatically onto their standard variable rate - commonly known as the SVR. This is not a calculated decision on your part: it simply happens, usually with minimal notification, and it can cost you hundreds of pounds more per month than a competitive alternative product.
The SVR is, almost without exception, one of the most expensive mortgage products your lender offers. It is the rate reserved for customers who have not actively chosen to do anything at the end of their deal - and the premium you pay for inaction is significant. The difference between a lender's SVR and a competitive two-year fixed rate is often between 1.5% and 3%.
On a £200,000 mortgage, an interest rate that is 2% higher than the best available alternative costs approximately £333 per month in additional interest. That is £4,000 per year - paid unnecessarily, by homeowners who simply have not taken the time to review their options.
How to check whether you are on the SVR
The quickest way to find out what rate you are currently paying is to check your most recent mortgage statement, log into your lender's online portal, or call your lender's customer service line. You are looking for two pieces of information: your current interest rate, and whether you are in an introductory deal period or on a variable rate.
If your statement shows a rate above 6% in the current market, you are very likely on your lender's SVR. Compare the rate shown on your statement to the deals currently being advertised by your lender for new customers - if the gap is significant, you are overpaying.
You should also check your original mortgage offer document: this will show you when your introductory period was due to end. If that date has passed and you have not actively taken out a new product, you are almost certainly on the SVR.
Product transfer vs full remortgage: what is the difference?
Once you know you are on the SVR - or approaching the end of a fixed rate - you have two main routes to a better deal:
A product transfer means switching to a new rate with your existing lender, without going through a full affordability assessment or legal process. This is quick and simple, and your current lender will typically contact you before your deal ends with a range of new rates to choose from. The advantage is convenience; the disadvantage is that you are limited to what your current lender is willing to offer, which may not be the most competitive rate available in the wider market.
A full remortgage means applying to a new lender entirely - going through a fresh affordability assessment, a new valuation of your property, and a legal process handled by a conveyancer. In return for this additional effort, you gain access to the entire mortgage market, which typically offers a wider range of products, more competitive rates, and additional incentives such as free legal work or cashback. Many lenders offer these incentives specifically to attract new customers away from their existing lender.
The right choice depends on your specific circumstances - particularly your current LTV, your employment situation, and whether your lender's product transfer rate is genuinely competitive. This is exactly where whole-of-market advice from an independent broker adds value.
What 'whole of market' really means - and why it matters
When a mortgage broker describes themselves as whole-of-market, they mean they can access products from every lender willing to deal through intermediaries - which is the majority of the UK mortgage market. This is in contrast to advisers who only represent a single lender, or a panel of a limited number of lenders.
The difference matters because mortgage pricing is not transparent in the way that, say, insurance pricing is. The best rate for your specific circumstances - your LTV, your income profile, your property type - may come from a lender you have never heard of. A whole-of-market search identifies this systematically, rather than depending on whatever your existing lender happens to be offering this month.
Loyalty to your existing lender is rarely rewarded in the mortgage market. Banks and building societies routinely offer their most competitive rates to new customers rather than existing ones - the opposite of what most people intuitively expect.
The six-month window: why timing matters
Most lenders will allow you to reserve a new mortgage rate up to six months before you need it - meaning you can lock in a rate today that will not complete until the end of your current deal. This is extremely valuable when rates are volatile.
Starting the remortgage process six months before your current deal ends gives you the maximum amount of time to find the best available product, complete the application, and have everything in place before you risk drifting onto the SVR. Starting later - particularly within two or three months - limits your choices and increases the risk of a gap between deals.
The ideal time to contact your adviser is therefore five to six months before your current rate ends, even if that date feels a long way away.
A quick five-minute check
• Find your current interest rate on your most recent mortgage statement or lender portal.
• Note when your current deal ends (or whether you are already on the SVR).
• Compare your rate to the current best-buy two or five-year fixed rates (widely available online).
• If the gap is significant - or if your deal is ending within six months - contact a whole-of-market broker.
A note from J Finance
J Finance is a whole-of-market mortgage broker. If you are on the SVR, approaching the end of a fixed rate, or simply want to check whether you could be getting a better deal, we will search the full market and give you an honest comparison - at no cost and with no obligation. Most clients who have drifted onto the SVR are surprised by how much they could save. Contact us today to find out where you stand.