Barclays also found that 28 per cent of people don’t know what the standard variable rate (SVR) is, and that 45 per cent aren’t clued up on what loan to value (LTV) means.
This has resulted in homeowners relying on others for help and guidance on remortgaging, with 46 per cent of people doing whatever their mortgage broker tells them, rather than fully understanding the terminology.
A spokesperson for Barclays Mortgages said: “It’s clear from our research that many find remortgaging a tricky subject to understand, even though UK adults have been on the mortgage payment ladder for an average of 13 years and five months. As a result, homeowners are sticking with what they know and potentially missing out on lower monthly payments.
“With the average amount left to pay on a mortgage at 45 per cent, and the best deals often found at lower LTVs, remortgaging sooner could end up saving them money – not only month to month, but over the whole term of their mortgage.”
Barclays also said those who do remortgage most commonly switch to a fixed rate deal with 93 per cent of customers who remortgaged in the first half of 2021 opting to lock in their rate for a fixed term.
Two-year and five-year fixed terms were revealed to be the most popular term lengths as 88 per cent of homeowners who remortgaged during this time chose to fix their payments for either two or five years, with 44 per cent choosing a two-year fixed term and 44 per cent choosing a five-year fixed term.
According to Barclays two-year fixed term deals were most popular with the under 30s, as 57 per cent of this age group opted for a shorter term fixed rate period of two years. By contrast, homeowners aged 40-56 were most likely to chose to commit to longer term five-year fixed rate deals, with 47 per cent locking in their monthly payment for this period.