This mistake is costing many homeowners thousands of pounds each year

Many homeowners in the UK don’t know what mortgage rate they are on, potentially costing them thousands of pounds each year.

Which? Mortgage Advisers surveyed over 3,500 people and found that 33% didn’t know what rate they were on. A further 41% only knew the approximate figure.

Londoners and 18-24-year-olds were best informed when it came to knowing their mortgage rate, with 80% and 74% respectively knowing the exact or approximate figure.

About 25% of those who took part in the study were on their mortgage lender’s standard variable rate (SVR) - usually costing more than other products available from the same provider. 

The survey also showed that around 55% of homeowners were on fixed rates, 10% on trackers, and 5%  on discount rates.

The Which? Mortgage Advisers’ findings reveal that borrowers with an average-priced home could end up paying as much as £347 extra a month - over £4,000 per year - by being on their lender’s SVR.

In London, average house prices are significantly higher and the cost of an SVR mortgage could be as much as £727 more each month – over £8,700 annually.

Of those on SVR who had had the same mortgage for at least the past five years, when asked why they hadn’t switched 22% said it wasn’t worth the hassle and 15% claimed that they hadn’t thought about it.

There is a clear level of apathy when it comes to mortgage deals, as 41% of those on SVR explained that they would be unlikely to switch even if they came across a cheaper deal today.

David Blake, of 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.”

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