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20% of mortgage holders are paying over the odds

According to recent data around 20% – or one in five – mortgage holders in the UK are paying way over the odds on their mortgage loan.

The research shows that twenty percent of mortgage holders stay with the least competitive deal that is on offer from their lender, which results in them paying more than they would if they were to switch to a more competitive mortgage.

The survey was carried out on behalf of moneysupermarket by YouGov, and showed that one of five mortgage holders stayed with the standard variable rate that was offered by their lender, and also that many borrowers were not even aware of the rate that they were paying and were failing to keep an eye on their finances.

Louise Cuming from moneysupermarket stated: "It's unbelievable so many people are playing into the lenders' hands and paying the standard variable rate. As this is likely to be at least two per cent above the leading rates available, this lack of action to review their mortgage could be costing borrowers dearly – having both a negative impact on their lifestyle and their future prosperity."

The research was carried out following prediction of another interest rate rise in May, which has resulted in many lenders taking some of their best rates off the market on fixed rate mortgages. Out of those responding to the survey around eleven percent had opted for tracker mortgages, whilst the majority of respondents had gone for fixed rates because of the increased financial stability provided by these. Twenty four percent of those responding to the survey actually owned their properties outright, and forty percent had a mortgage. Tom Smith
4th May 2007


More Information:

  • Mortgage Terms: What is the Best Length?
    How long would you like you mortgage to run? The simple answer would be as quickly as possible, but not everyone can, which means higher repayments and more strain on the household budget.
  • Mortgages – What Will Be Next?
    Maybe some forty years ago mortgages were very solid things that you took out: you would stick with the same company for the entire period of the loan and you could find fixed rate deals that would also last the full twenty five years.
  • Paying Off Your Mortgage Early
    Twenty five years is the average period of a mortgage… Twenty five years is a long time! The dream of many people is to pay off their mortgage early. Can it be done?
  • The True Cost Of Your Mortgage
    It’s easy to say “go and research the market place to find the cheapest mortgage”, but is it that easy to actually do it and how do you know that you have really got the best mortgage deal when you’ve finished?


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