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Nearly half of homeowners consider ERCs to switch to a better rate

  • 19/12/2022
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Nearly half of homeowners consider ERCs to switch to a better rate
Almost half (45 per cent) of homeowners have already paid an early repayment charge (ERC) to exit their current mortgage deal and secure a better rate or are thinking of doing so.

According to a survey of 2,000 homeowners conducted by The Mortgage Lender (TML), this is one of the ways people are coping with rising mortgage and living costs. 

Within the share of people considering paying an ERC, seven per cent said they had already done so in order to get a new fixed rate. Some 13 per cent said they plan to pay an ERC, while a quarter are still considering it as an option. 

TML warned that this could mean fixing onto a rate which is higher than necessary, as pricing is slowly falling and set to keep declining in the next few years. 


Lodgers, downsizing and extra work on the table

A tenth of respondents said they had taken on extra work to afford rising costs and seven per cent said they now had a lodger to help with payments. 

A further 10 per cent said they will downsize to reduce costs while a fifth said they were considering this option. Nearly a quarter (24 per cent)  revealed they were considering selling up completely and renting instead. 

Seeking advice from a mortgage broker seemed to be of importance to respondents, as 13 per cent said they had already consulted an adviser while 27 per cent will be doing this and a quarter are considering it. 

Steve Griffiths (pictured), head of sales at The Mortgage Lender, said: “It can’t be denied that the cost of living and rising costs are starting to bite, so it’s not surprising that borrowers are looking for ways to save their money. What’s vital is that they seek advice from a professional before making any changes. Encouragingly, we are seeing many people speaking to their brokers or planning to do so.  

“Brokers play a pivotal role in supporting consumers make one of the biggest financial decisions in their lives and can help navigate the market to find the best possible deals that suit individual circumstances and factor in true costs.” 

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