94% uninfluenced by base rate cut to switch mortgage
New research from online mortgage broker Trussle has revealed that despite a wave of mortgage rate reductions from lenders triggered by August’s base rate cut, 94% admitted they haven’t considered switching to a better deal. The research also highlighted that just 28% of British mortgage borrowers have ever switched provider to get a better deal.
The study found that mortgage holders were more than twice as likely (63%) to have switched energy provider than their current mortgage lender, despite the annual savings from doing so being far lower. Switching energy provider can lead to savings of around £200 a year compared to the £2,800 which could be saved by switching mortgage provider.
When asked what had stopped them switching mortgage, one in five borrowers said they feared the process would be too much hassle, while 14% claimed it was too complicated. Around one in seven (15%) claimed they haven’t switched because they thought they would be penalised for doing so, while just 7% said they stay with their current lender out of loyalty.
According to the research, borrowers in Scotland are most proactive when it comes to switching mortgage with 41% having done so. This is considerably higher than the 29% of Londoners who have switched, and far more than the 16% of borrowers from the Midlands who have tracked down a better mortgage deal.
Ishaan Malhi, CEO and founder of Trussle, said: “It’s shocking that almost three quarters of mortgage borrowers have never switched provider in search of a better deal. Especially as households across the UK are throwing away thousands of pounds every year by failing to take advantage of the best rates on the market.
Part of the problem is clearly a lack of awareness, but many borrowers are simply reluctant to face the ordeal of switching. However, mortgage rates have fallen to record lows, and technology is making switching mortgages easier than ever. Now’s the time for borrowers to take charge of the situation.”