While remortgaging accounted for more than half of all new UK mortgage lending in January, new findings show that of the 57% of borrowers who are still not tempted to switch their mortgage, a surprising 72% don’t feel there are any savings to be made, despite the lowest Bank of England base rate since 1955.
Commenting on the results, Guy Aldwinckle, head of mortgage marketing at Abbey National, said: “We are seeing an increasing number of homeowners remortgaging, but there is still a large group who are unaware of the savings to be made from switching their mortgage. The misconceptions about how easy and straightforward the remortgaging process can be are deterring people from looking for a better deal. However, it really can be a very straightforward process with very little time and effort needed by the customer to enable them to make what can potentially be significant savings.”
When asked about why they wouldn’t switch, a fifth of borrowers (20%) put it down to just not being bothered or not being aware of the real financial benefits. Time taken to remortgage also seems to be a stumbling block, with 22% of respondents stating they believe that it could take over three months for their lender to organise the switch. Over a third (36%) believed that it would take up too much of their personal time, more than a week in total with form filling and finding out necessary information. Surprisingly, one in ten borrowers still think that remortgaging is only possible if they move house.
The research also revealed people are more likely to switch supermarkets to save a couple of pounds every week rather than switching their mortgage which could save more than £100 every month.
