Interesting new research from online mortgage broker Trussle has indicated that despite a number of rate reductions from online lenders triggered by the base rate cut in August, the majority of homeowners have not looked for a better deal.
Remarkably, the study found that 94% of property owners have not searched to see if they could find a better deal elsewhere. In addition, only 28% of UK mortgage borrowers have switched providers to get an improved rate.
The results of the survey suggest that a number of buy-to-let investors could be missing out on huge savings by not switching to a different deal. What’s more, the investigation found that 63% of mortgage holders were more likely to move energy provider than their mortgage lender, despite yearly savings being much lower.
It is estimated that by switching energy provider, property owners can save around £200 per year. This is in comparison to the £2,800 that could be saved by switching mortgage providers.
As such, investors with landlord insurance on a property could be missing out on substantial savings.
When asked why they had not looked for a better mortgage deal, one in five borrowers said they couldn’t face the hassle. 14% said the process was too complicated. 15% said they haven’t moved due to fear of being penalised, while 7% said that they stay with their current lender purely out of loyalty.
Those in Scotland were found to be the most proactive, with 41% actively searching for a better rate. 29% of Londoners were found to be doing the same.
Ishaan Malhi, founder of Trussle, noted: ‘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,’ Malhi added.