With the Bank of England base rate remaining at 0.5% for a record 31 months now, tracking data from unbiased.co.uk reveals the continuation of the "interest rate-spoilt" generation means homeowners may be missing out on the lowest fixed-rate deals on the market in decades.
The data reveals standard variable rate (SVR) mortgages are still the preferred option with 37% of homeowners, rising from 35% from January 2011. With SVRs remaining lower than best-buy fixed-rate mortgage deals in the current market place, it appears homeowners are still refraining from remortgaging to a fixed rate deal until the base rate starts to rise.
A huge 46% of homeowners have not reviewed their mortgage at all since March 2009 when the base rate first hit 0.5% and 16% believe the base rate is so low they do not need to worry about reviewing. With fixed rates falling below 5% for the first time in decades and the threat of future interest rate rises becoming more real, homeowners are potentially missing out on the best fixed-rate deals.
When it comes to fixing however, the rate homeowners would be prepared to fix at now is an unrealistic 3.4%. This has dropped from an average 4.0% in January 2009. Interestingly the last 24 years has never seen five-year fixed rates lower than 4.99% and the current average three-year fixed rate is 4.35%. Despite the current market conditions and fixed rates reaching an all-time low, homeowners remain out of touch with what is available to them.