Two thirds of homeowners don’t know what rate they’re going to have to pay when their initial deal period ends. Not that it seems to matter, as only 33 per cent will even bother to look when that time comes, according to a new survey by First Active.
The older generation is the worst, with 71per cent of over 55s not knowing what their new rate will be, meaning they are completely unaware of how much they could save if they were to switch to a better deal. Not surprisingly, this makes the over 55s the most loyal, with 88 per cent saying they planned on sticking with their existing mortgage provider.
By contrast, the so-called ‘rate tart’ generation of young buyers are the most likely to move to a better deal. 47 per cent of 25-34 year olds said they planned on switching once their initial deal period ended.
When it comes to switching their mortgage, the Welsh are the least loyal to their lenders and perhaps the most financially savvy, with 39 per cent saying they plan on switching to a better deal once their discount period has ended. In contrast, homeowners in the South East are the most ostrich-like, with only 18 per cent planning to change mortgage provider.
Louis Kaszczak, national partnership manager, commented, “These days, mortgage providers are making it easier than ever for borrowers to save money by switching to a better rate. Yet despite the availability of attractive, money-saving options, many homeowners mistakenly believe the process will be overwhelming and not worth the hassle.”
“However, homeowners don’t necessarily have to shop around. At First Active, we offer all customers the same great deals. Once their initial deal ends, customers can take their pick from our best offers with no penalties and no basic legal and valuation fees. Or they can simply move onto our competitive long-term rate of 5.74% (0.99% above BoE rate) for the remainder of their mortgage.”
