British homeowners could save an average of £169 a month by remortgaging to a fixed-rate deal at today’s low rates, according to research1. This figure equates to an annual saving of over £2,000, yet almost nine in 10 borrowers haven’t thought about switching lenders.
In March 2020, at the start of the pandemic, the Bank of England base rate was cut to a record low of 0.1% in a bid to reduce the pandemic’s impact on the economy. The move hit savers hard, but homeowners have potentially stood to benefit.
Embarking on a cost-cutting exercise
As the economic repercussions of the pandemic have continued to be felt, just under three-quarters (70%) of homeowners began 2021 with the aim of reducing spending and getting their finances into good order for the year ahead.
However, while smaller cost-cutting exercises such as switching energy provider (33%), reducing takeaways (60%), and eliminating takeaway coffees (29%) have featured high on the list, only one in 10 say they have considered remortgaging as a means of reducing expenses. This is despite 84% saying their mortgage is their biggest monthly outgoing.
Busting remortgage myths
The research highlights several reasons why homeowners are hesitant about switching to a new mortgage deal, including:
‘I’m content with my current rate’– Over half of respondents claim they are already happy with the current rate they are paying. Yet switching to a more competitive rate could save around £2,000 a year, so considering your options seems sensible.
‘I want to avoid fees’- A further 16% cite concerns about ‘unnecessary fees’ and 15% believe they cannot remortgage due to Early Repayment Charges (ERC). We can help you fully understand the costs involved and assess whether it’s more cost-effective to pay an ERC to leave your current mortgage deal early and secure a lower rate, or not.
‘It’s too stressful’- A quarter of homeowners believe the process of remortgaging to be daunting or too stressful (12%). However, we can help you find the most suitable mortgage for your needs and take you through the process one step at a time. We can liaise with your lender on your behalf.
‘It takes too long and not sure where to start’ – Around 14% of homeowners say the remortgagingprocess takes too long. We understand that navigating your way through the mortgage maze can feel overwhelming, but we can help guide you and drastically reduce the time it takes to switch to a new deal.
Time well spent
If you’re interested in considering your options when it comes to remortgaging, don’t hesitate to get in touch to see how we can help. Spending a little time with us could potentially save you money on what’s likely to be your largest monthly outgoing.
Your home may be repossessed if you do not keep up repayments on your mortgage.
You may have to pay an early repayment charge to your existing lender if you remortgage.