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Half of Brits have never remortgaged

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  • 22/03/2017
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Half of Brits have never remortgaged
UK homeowners could be wasting money on their mortgage by holding the wrong type of mortgage or not knowing what rate they are paying – and many have done nothing to change that.

More than one in three homeowners could be wasting money by sitting on a standard variable rate (SVR) mortgage instead of a lower fixed or discount rate loan.

The majority of mortgage holders have also never remortgaged to save money and almost one in three (30%) did not know what mortgage rate they were on.

London and Country, which conducted the research, said the results were particularly concerning given the increasing inflation rate which raised the prospect of interest rate rises.

The intermediary questioned 2005 homeowners – 728 of which said they were on their bank or building society’s standard variable rate; 1,163 had never remortgaged to save money; and 608 did not know what their interest rate was.

£2,500 saving

Analysis by London and Country suggested mortgage holders could save £2,500 per year by coming off an SVR.

It calculated a potential new payment on a repayment basis using an indicative two-year fixed rate, at a level that encompassed a broad range of lender and fee options.

Unsurprisingly, London topped the table with an average monthly overspend of £266.

Residents in the south of England and the Midlands collectively overspent by an average of £222 and people in the North paid £201 more than they could be.

L&C Mortgage associate director David Hollingworth (pictured) said it was worrying to see so many people still on an SVR mortgage as they were not the cheapest rates available.

“Not only is there a lack of awareness around how much could be saved but worse still a huge number of people have never even tried to remortgage to get a better deal,” he said.

“With the cost of living on the rise and day to day expenses like energy prices soaring, it is hugely concerning to see that people are paying so much more than they should be.  On top of this, our research shows that while homeowners believe they are paying too much for their mortgage they still aren’t taking action to cut their monthly payments.”

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