This is according to Legal & General Mortgage Club which has also found 50% of homeowners were concerned their decision to take a payment ‘holiday’ would impact their ability to borrow in future.

The findings have raised concerns many borrowers who had seen their income fall due to Covid-19 may soon be paying well over the odds in monthly repayments. Indeed, the study discovered 32% of borrowers in this situation were considering sticking with the SVR once their existing product expired.

L&G thinks this could impact over 700,000 borrowers who will reach the end of their two and five-year residential fixed rate mortgages in 2021.

It found over half (52%) of borrowers who have seen their income reduced as a result of the crisis were concerned lenders will now be scrutinising their finances in more depth compared to pre-Covid levels.

What’s more one in two (50%) were concerned that their decision to take a payment ‘holiday’ would affect their future mortgage options, and two thirds (67%) believed it would be harder to get a mortgage when furloughed.

Those who had seen their incomes negatively impacted by the pandemic are also far more likely to feel ‘not confident’ about remortgaging compared to borrowers whose incomes have remained stable (14% and 3% respectively).

Product transfers

Even among those who didn’t plan to revert to their lender’s SVR, over half (52%) said they were now more likely to stick with their current lender when looking for a new product. Over a third (37%) were doing so because they believed this would be the easiest way to secure a new deal.

Kevin Roberts, director of Legal & General Mortgage Club, said: “While the coronavirus crisis has undoubtedly affected people’s finances in different ways, those who have seen their incomes drop will likely be finding this a particularly challenging time so it’s vital they avoid falling onto a reversion rate and paying more when there are other affordable options available.

“Covid-19 may have dampened the confidence of a large number of borrowers wanting to lock into a new rate, yet the cost of not exploring their refinance options could be significant.

“Even for those borrowers who have seen a reduction in income, there may well be products available that would save them money in the long term when compared to their lender’s SVR.”