As many as one in three UK homeowners don’t know what mortgage rate they are on, potentially costing them thousands of pounds each year, according to Which? Mortgage Advisers.
The consumer watchdog surveyed over 3,500 homeowners with a mortgage in the UK and found that 33% didn’t know what rate they were on, while 41% only knew the approximate figure.
When it came to who were the best informed, 80% of Londoners and 74% of 18 to 24-year-olds knew the exact or approximate figure.
Some 25% of those who took part in the survey were on their mortgage lender’s standard variable rate (SVR), usually costing more than other products available from the same provider.
The survey revealed that 55% of homeowners were on fixed rates, while 10% were on trackers and 5% on discount rates.
The findings show that borrowers with an average-priced home could end up paying as much as £347 a month (over £4000 a year) more on their lender’s SVR.
However, with average house prices in London significantly higher, the cost of an SVR mortgage in the capital could be as much as £727 more each month – over £8700 per year.
Of those on an SVR who had been on the same mortgage for at least the past five years, when asked why they hadn’t switched, 22% said it wasn’t worth the hassle and 15% claimed that they hadn’t thought about it.
There was also a lack of concern regarding mortgage deals, as 41% of those on SVR explained that they would be unlikely to switch if they came across a cheaper deal today.
David Blake, principle mortgage adviser of Which? urged anyone with a mortgage to check what interest rate they’re on and whether they are paying more than needed.
“The remortgage market is highly competitive at the moment, so there’s a good chance that remortgaging will save you money. Speaking to an independent mortgage adviser is a great place to start to find out your options,” he said.