DON’T FORGET TO SWITCH ON TIME
an estimated 800,000 borrowers waste £1,000 a year because they leave it more than six months to find a better deal when their current fixed or discounted offer ends.
The FCa says some lenders will target certain customers with offers for new rates when they get to the end of of their deal, but not others.
another problem highlighted by the FCa is that we’re all so busy — particularly when moving home dealing with buyers, sellers, solicitors and agents.
Typically, borrowers roll onto expensive standard variable rates (svrs), which are the costly deals lenders move you onto once your introductory offer period is over.
Money Mail analysis found the savings on offer can go as high as £3,205. The average svr is 4.77 pc, while the cheapest two-year fixed rate for those with a 40pc deposit is currently 1.36pc with no fee, from danske Bank, according to comparison website Moneyfacts. a borrower with a £150,000 mortgage would save £3,204 by switching from the variable rate to danske Bank.
Charlotte nelson a finance expert at Moneyfacts said: ‘With mortgage rates rising this is an ideal time for the FCa to highlight their concerns about the mortgage market, as the lowest-priced deal is not always the best choice for borrowers, based on true cost. Customers need to weigh up the rate, fees as well as any incentives to find the right deal and not be blind-sided by lowest rates alone.’
robert sinclair, chief executive of the association of Mortgage intermediaries said: ‘There are a series of contradictory statements in the Mortgages Market study. despite the broad conclusions being very positive and there being no recommendations for significant change, aMi agrees with the FCa that the market could still be improved.
‘This is why we have indicated that we will work with the FCa to develop better tools in order to assist consumers in understanding which brokers can provide then with a full or limited service and how we ensure that lender criteria are better understood by all market participants.’
Tashema Jackson, money expert at uswitch.com, says: ‘The FCa’s report highlights that there could be real opportunity for further innovation in how consumers compare and take out mortgages.
‘Price comparison sites are pretty good at showing consumers the mortgages available, but aren’t able to access the data required to show prospective customers what mortgages they might be eligible for.
‘if the FCa could help comparison sites access this information from the lenders themselves, comparison could be even more useful for mortgage consumers.’