Up to 2.5 million UK home buyers are currently being over-charged by up to £274 a month on their mortgage, according to findings from Tesco Bank’s new Home Buyers Report.
The bank found that home buyers are already having to save an average deposit of £61,607 for their new house, and are making a variety of lifestyle choices in order to afford their mortgage and associated costs after they move in.
Many homeowners don’t realise that after their fixed-term rates, they often fall onto higher Standard Variable Rates (SVRs) and end up over-paying up to £2741 a month on their monthly payments. We want to help ensure homebuyers don’t have to make such drastic lifestyle changes to meet their mortgage repayments, and that’s why we offer existing customers access to the Bank’s competitive rates, 12 weeks before the end of their fixed rate term.David McCreadie
The survey found that 30% of buyers reduced their social spending to afford payments, 25% cut back on taking holidays, and 10% either worked additional hours or took a second job. Buying a house is often the biggest single transaction a person will make, and the findings highlight the fact that unexpected costs can really take their toll on home buyers.
Being aware of the associated costs of moving house is now imperative, as things like broadband installation costs, change of move-in dates and unreported damage make this process more expensive than ever before.
As a result of these expected and unexpected costs, just below 40% of home buyers have no savings left after purchasing a home. This has led to home buyers needing to reduce their discretionary spending – things like going out for dinner, to the movies or just treating yourself to a takeaway.
Moving house is undoubtedly one of the most stressful experiences in life and one that can be financially straining for many. These stresses and strains can be exacerbated by the minefield of hidden costs that can often be overlooked by the UK’s home sellers and buyers.
Our advice is to always be prepared and plan ahead. Today, the internet enables us to be savvy when it comes to saving and allows us to search out the best deal possible on everything from our removals company, energy provider and with the rise of the online estate agent, even the price we pay to sell our home.Russell Quirk