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Home Owners missing out on Loan Deals

Millions of UK home owners are missing out on competitive mortgage deals as they stick with their provider. An incredible 18m home owners have never remortgaged their homes meaning they miss out on thousands of pounds worth of savings as they stick with their lender's original standard variable rate.

Opting for a fixed rate or discounted deal would mean cheaper monthly repayments and more savings due to lower interest rates.

Broker Purely Mortgages have revealed that two-thirds of people who have lived in their homes for more than 20 years have never remortgaged and are therefore paying more in repayments unnecessarily.

According to the broker 15% haven’t remortgaged as they thought they had to move home to do so.

Another 8% thought the cost of remortgaging outweighed the benefits and a further 7% believed they were already receiving the best deal they could get.

More than half of people aged between 30 and 50 have never remortgaged and a quarter of those who have done, haven’t swapped in the last five years.

Depending on the type of mortgage, the savings to be had by continually swapping to the best deal on the market can yield staggering savings. Purely Mortgages estimate that a borrower on a £150,000 interest-only home loan, swapping every two years to a deal that is, on average 2% cheaper than the Standard Variable Rate, would save an amazing £16,500 in interest over ten years compared to a home owner sticking to their original borrowers SVR of 6.5%.

Mark Chilton of Purely Mortgages said: “ It is unrealistic to expect borrowers to remortgage constantly but even looking closely every few years could mean you saving thousands in the long term.”

Sally Lauder of Alliance and Leicester said: “ If you are at the end of a deal or aren’t tied in, now is a great time to shop around because there are some extremely competitive deals about.

“ It is always best contacting your existing lender first to see what they can offer you and then use independent sites to compare deals.”

As home loans are usually long-term financial commitments, shopping around and obtaining the best deal for you will almost certainly result in thousands of pounds being saved in the long term.


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