Just a couple of years ago, many individuals who were looking to take out a mortgage loan hardly gave any consideration to the standard variable rate of interest which their new lender offered, as most borrowers had taken a short term fixed, or discounted rate loan for two or three years.

Once the product reached the end of the initial deal, the borrower would simply re-mortgage and obtain a new cheap loan for the next couple of years, repeating this process until the mortgage was repaid in full, so what was the point in even thinking about the standard variable rate, if they were never going to pay it?

Two years down the line and there have been some drastic changes within the mortgage and loan markets. The effects of the credit crunch has meant that a huge number of cheap loan and mortgage products have disappeared altogether from lenders’ portfolios and those which are left are subject to much tighter lending criteria, restricting the amount of loan someone may now be eligible for, which means that the nice re-mortgage deal that borrowers were taking for granted two years ago may no longer exist and they are likely to be stuck with their existing lender, paying the often expensive standard variable rate.

As a result of this, borrowers are now paying much more attention to the long term cost of their mortgage loan, as many now realise that they are likely to be paying the standard variable rate for some considerable time, once the initial deal has finished.

According to research from the Nationwide building society, 53 per cent of borrowers were now taking more interest in the standard rate than they were twelve months ago and 56 per cent said that they would shop around further for a new mortgage loan, taking into account the standard rate of interest and also the initial fees charged by the lender. In addition to this, 44 per cent said that they would now be looking at a longer term fixed rate of five, or more years.