Data from Halifax shows fixed rate mortgages fell to their lowest levels in 2015, while the standard variable rate remained static.
Over the last 12 months, the average interest rate on a new fixed rate mortgage fell a further 0.59 per cent whilst there was no change in the standard variable rate over the same period.
The average fixed rate now stands at 2.66 per cent compared with the average standard variable rate of 4.49 per cent, with the gap between the two widening by 1.81 per cent since August 2012.
Halifax said that as a result, the amount homeowners could be saving by switching to a fixed rate deal has increased by 50 per cent in the last two years.
According to the building society, in November 2013, the average monthly payment of a homeowner who took out a two-year fixed rate on a £100,000 mortgage would have been £485 while at the same time, the payment on a standard variable rate mortgage would have been £551 – a monthly saving of £66.
Therefore, a borrower taking out a fixed rate in November 2015 would be paying £457 a month on a £100,000 loan compared with £555 on the average standard variable rate.
This would result in a saving of £99 a month; 50 per cent more than two years earlier.
Craig McKinlay, mortgages director at Halifax said with the base rate remaining at record low levels for another year, fixed rate mortgages fell further in 2015.
Dale Jannels, managing director at All Types of Mortgages, said: “Lenders have been burnt before with low product reversion rates so it is no surprise that standard variable rates are remaining static while all other rates decrease.
“But it does amaze me how many people are happy to sit on standard variable rates and not change products and providers.
“Lenders are paying valuation costs and legal fees on remortgages, so the cost to the consumer to change lenders and save money, is minimal.
“Following recent suggestions that bank base rate will not change until at least 2017, we’re also seeing a lot more customers looking at tracker rates.”
ruth.gillbe@ft.com
