Post Office mortgage has said that millions of borrowers could be paying over the odds because they do not know where their SVR (standard variable rate) stands. Despite the Bank of England rate standing at a record low of 0.5 percent, many lenders have significantly raised their SVR and homeowners should not assume that they are getting the best possible deal."If you're thinking about switching mortgage, now is the best time to do it, before rates rise further," said Post Office personal lending director Marco Hughes

Figures published by Credit Action showed that around 11.1 million households in the UK currently have mortgages and the average outstanding is £111,474.

Meanwhile competition has forced mortgage lenders to significantly reduce interest rates on the most popular products. Apart from Santander, whose cuts we had reported on yesterday,The Co-Operative Bank has revealed a new market leader deal with a two-year fixed-rate with an LTV of 75 percent at 3.19 percent with a fee of £999. There is a new offering at an LTV of 85 percent of 4.49 percent with the same fee. Cuts have also been offered by Northern Rock and Chelsea Building Society.

Many brokers have welcomed the development which they say is an indication that lenders are more comfortable with small deposit borrowers now that housing prices seem to have stabilised.Aaron Strutt from Trinity Financial Group said: "There will be hundreds of thousands of homeowners on SVRs which are not as competitive as the best deals available from their lender. Moving onto a new deal could significantly reduce the cost of monthly repayments for many homeowners."

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