A million households could be paying too much for their mortgage
More than a third (36%) of homeowners are still on a Standard Variable Rate mortgage (SVR), and could be paying over the odds for their homeloans, according to L&C Mortgages. This adds up to an estimated four million people.
The broker said that not only are these rates typically higher than alternatives but they are vulnerable to increasing if the Bank of England hikes its Base Rates.
L&C also found that a further 1.1 million households are wasting £2.78bn by sitting on the wrong mortgage deal.
By switching to a better deal, UK homeowners could save an average £216 each month or over £2,500 annually. However, surprisingly over half (58%) have never re-mortgaged to save money.
David Hollingworth from L&C Mortgages, said: “It’s worrying to see so many people still on a Standard Variable Rate mortgage as they are 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.”
The broker found that 3.4 million people don’t know their mortgage rate, despite the fact they could potentially save hundreds or even thousands of pounds a year by remortgaging to a new deal.
London tops the table of the regions where households are overpaying the most, with an average monthly overspend of £266. The south of England and the Midlands collectively overspend by an average of £222 and the North is paying £201 more than they should be.