However, according to new research from The MarketPlace,the opportunity is being spurned - either through ignorance or misconception.
The research, conducted by NOP* on behalf of The MarketPlace at Bradford & Bingley, reveals that 42% of current mortgage holders think the remortgage process will be too lengthy and time consuming with almost a quarter (23%) believing the process will take 2 — 3 months or longer to complete. Four in ten (40%) imagine it will be complicated, 35% think it will be expensive whilst 41% think it will be too much hassle.
In actual fact, The MarketPlace estimates that the whole process will take between 4-6 weeks (in some cases it can even be shorter) and will only require approx. 4 hours of a borrower’s time.
Elliot Nathan, mortgage development manager for The MarketPlace, comments: "The results show that one of the biggest factors affecting homeowners’ propensity to remortgage is the perception that the process is too time consuming and taxing. In reality though, once you’ve shopped around or visited a mortgage broker to find the best deal available, the process is pretty simple and hassle-free and takes typically 4 to 6 weeks.
"Another factor affecting homeowners is the assumed cost. Over a third (35%) think remortgaging would be too expensive. With many competitive fees free deals, however, some with added benefits such as cashbacks, the savings that can be achieved through remortgaging, in many cases, far outweigh the costs."
Example:
A homeowner with a £100k mortgage on an average standard variable rate could save £121 a month (over £1,450 a year) by switching their mortgage to market-leading deal.** During the course of a year this effectively works out at over £350 saving for each hour of the borrower’s time.
Nathan continues: "A particularly worrying finding is that a third of those with a mortgage (32%) would only consider the option of remortgaging if they were in financial difficulties. Switching to a better deal, however, can significantly reduce monthly outgoings and can help prevent money problems starting in the first place."
Breaking down the barriers
Nearly a fifth (18%) admit that they wouldn’t know how to remortgage, with 27% confessing they’ve never considered it and 35% saying they would only think about it if they were moving house.
Nathan concludes: "The level of unawareness and misunderstanding around the remortgage process is quite alarming and illustrates just how much education is still required to dispel the myths and misconceptions. In truth, the remortgage process is relatively simple and hassle-free and can bring substantial savings eclipsing the small amount of work and cost involved. Homeowners, though, who are unsure about what to do or simply want advice on the best deals available should speak to an independent financial adviser."
The MarketPlace has produced a booklet ‘Guide to Remortgaging’ which offers borrowers some invaluable information on the steps to remortgaging, the costs and the benefits. Borrowers can request a copy by phoning The MarketPlace free on 0800 11 33 33 or visiting their local Bradford & Bingley branch.
