However, despite the rises, Yorkshire Bank’s research found only 17 per cent of homeowners were reviewing their existing mortgage arrangements to check they were still getting the best deal and the lender said consumers were not making the most of their finances.
Yorkshire estimated consumers are losing out on £1.9 billion of interest by not putting extra cash from their current account into a high interest savings account. Of the 1,000 people surveyed, 22 per cent admitted they did not have a savings account.
Stephen Porter, senior marketing manager at Yorkshire Bank, commented: “People with offset mortgages won’t suffer as much in this climate of rising interest rates, as their savings rate will have a greater offsetting effect on their mortgages. Yet, people are not making the most of their savings account. Our research has found two-thirds of us have money left in our current account every month – on average we have around £316 sitting idle.”
However, Steve Brockman, director for A2B Mtg Co, said: “A lot of consumers aren’t that keen to have all their eggs in one basket and like to keep their savings separate from their other accounts. Offset will come more and more into play as interest rates rise, but it is all to do with circumstances. Offset becomes more effective with a substantial income.”
