The online mortgage solutions company warned that borrowers were potentially missing out on significant savings by staying with their existing lender.
mform.co.uk’s research showed that 5.3 million homeowners had the same mortgage for more than 10 years. A third had not changed mortgage providers for 10 years and 8 per cent had stayed with the same lender for 21 years or more.
mform.co.uk urged homeowners who hadn’t switched mortgages to research the market to find a better deal.
In the majority of circumstances it suggested that customers who had stayed with the same lender had usually switched onto the lenders’ standard variable rate (SVR). The SVR at the top five mortgage lenders currently ranges from 6.74 per cent to 7 per cent per cent, compared with average fixed rate deals of around 5.20 per cent.
Eamonn Rice, chief executive at mform, said: “Loyalty is a fine thing but not when it costs you a lot of money. That’s the effect of sticking with one lender forever. There’s a lot of choice in the market and homeowners should take advantage.”
Borrowers can use the mform.co.uk service to choose a mortgage based on rates, features and service levels from lenders.
Anthony Badaloo, manager at Church Hill Finance, commented: “This has always been a well known fact within the mortgage industry. Most financial institutions will make money offering attractive discounts initially and then will rely on human inertia once the deal has come to an end.”
