The oversight costing homeowners £4,000 a year
Consumer group Which? surveyed more than 3,500 homeowners with a mortgage in the UK and found that one in three didn’t know what rate they were on. A further four in 10 only knew the approximate figure.
Homeowners in Wales were the least likely to know their mortgage rate, with just one in five knowing the exact figure and four in 10 knowing the approximate figure.
Londoners and 18-24 year olds were best informed, with 80% and 74% knowing the exact or approximate figure respectively.
Worryingly, one in four of those surveyed were on their mortgage lender’s standard variable rate (SVR), usually costing more than other products available from the same provider. The survey showed that 55% of homeowners were on fixed rates, 10% per cent on trackers, and 5% on discount rates.
Borrowers with an average-priced home could end up paying as much as £347 a month – or over £4,000 per year – more on their lender’s SVR, the research said.
In London, where average house prices are significantly higher, the cost of an SVR mortgage could be as much as £727 more each month – over £8700 per year.
Reasons given for not switching from an SVR to a cheaper deal included “it wasn’t worth the hassle” and “they hadn’t thought about it”.
David Blake, principal mortgage adviser at Which? Mortgage Advisers, said: “I would urge anyone with a mortgage to check what interest rate you’re on and whether you’re paying more than you need to.
“The remortgage market is highly competitive at the moment, so there’s a good chance that remortgaging will save you money. Speaking to an independent mortgage adviser is a great place to start to find out your options.”