Research from Bradford & Bingley has revealed that remortgaging concerns persist and reveals that some 3.3m mortgage holders could potentially be wasting around £6 billion a year
The average UK borrower would only remortgage if they could save £93 amonth new research from Bradford & Bingley has shown. This 'trigger point' reflects homeowners desire to save money on their monthly repayments, but only if the price
is right. However, with over a quarter of borrowers (26%) content to languish on their lender's standard variable rate (SVR) it is clear that many remortgaging misconceptions persist.
The research, conducted by NOP, reveals that 30% of borrowers who haven't considered remortgaging haven't done so because they think it takes a lot of time and hassle, with 28% believing it quite expensive.
22% have just never thought about remortgaging, 20% wouldn't know how to go about it and14% didn't know they could remortgage unless they moved house.
Such misapprehensions and misunderstandings are costing homeowners dear.
Bradford & Bingley reveals that some 3.3 million mortgage holders could potentially save around £6bn a year in mortgage payments if they switched from their current SVR rate onto a market-leading deal.
David Bitner, head of mortgages for Bradford & Bingley, said:
"Homeowners are increasingly recognising the savings they can make on their monthly repayments by remortgaging onto a competitive deal, with £93 being revealed as the all important trigger point. Despite this growing awareness, however, there still exists some crucial misconceptions. One of the biggest factors affecting homeowners propensity to remortgage is the belief that the process is too time consuming and taxing. In reality though, once you have shopped around or visited a mortgage broker to find the best deal, the process is pretty simple and hassle-free and takes typically 4 to 6 weeks.
"Another aspect affecting homeowners is the assumed cost. More than a quarter (28%) think remortgaging would be too expensive. While it is true that many lenders have increased their arrangement and exit fees over the last couple of years there are still a number of competitive deals available. There are those with free legals and free valuation fees, some with added benefits such as cashbacks, meaning, in many cases, the savings that can be achieved through remortgaging far exceed the costs."
Bitner concluded: "While remortgaging may not be worthwhile in every case, for instance on some lower balances, in most other cases it makes complete financial sense."
