Half Of Borrowers Don’T Review Their Mortgage

Posted on: 18 March 2012

Some 49% of borrowers have admitted to not reviewing their mortgage over the past three years, research from Unbiased has revealed.

Around 56% of mortgage holders did not know the rate they paid on their deals.

Of those that did know their rate, fixed rate mortgage holders paid an average rate of 4.63% however around two in five were paying a rate of 5% or higher on their fixed rate deals.

This is a difference of £169 per month compared to one of the best buy rates available at the moment.

Unbiased does however warn that making the decision to switch to a different type of mortgage or change lenders could include fees and penalties. It therefore calls on consumers to seek advice from specialist advisers.

Karen Barrett, chief executive of Unbiased, said: “If the recent decision by Halifax and RBS to increase their Standard Variable Rate is an indication of the direction of the market, then we will see more increases to the rates that consumers are paying on their mortgages, making it more important than ever for people to shop around for a better deal.

“The important thing to remember is that while lending criteria have tightened, not all is lost if you are not the perfect borrower. High loan to value deals may be harder to find but we have seen numerous lenders re-enter the market at the 90% LTV mark.

“Other factors to consider before you embark on switching your mortgage are redemption charges, mortgage arrangement fees and any other costs associated with mortgages.”

Barrett added that 14% of mortgage borrowers said they would not be reviewing their mortgage because base rate was so low.

She said: “That could mean they are missing the opportunity to make substantial savings on their mortgage payments.

“The good news is you don’t have to do the work yourself, a whole of market mortgage adviser will look at the best deals available taking your financial situation into account and help you make the right decision.”

David Sansome, Managing Director at estate agents Sansome & George added: “We echo both the findings and advice emanating from this report. Our mortgage advisers shall be pleased to advise customers on their individual circumstances and the best course of action for them.”

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