‘Loyalty penalty’ for home owners
Two fifths (42%) of people whose fixed-term mortgages have ended since the start of the first lockdown in March 2020 have taken no action to switch, according to Citizens Advice. The charity fears these home owners could be paying a loyalty penalty for sticking with their existing provider.
The Financial Conduct
Authority (FCA) has estimated that not switching could leave loyal mortgage customers charged an average extra £1,000 a year in bills. Citizens Advice warns that the burden is falling on the consumer to get the best deal and those who do not switch are at risk of paying over the odds for their mortgage.
The research also found that one in five (21%) mortgage customers who did not switch said the process was too time consuming or difficult. Many have also been unable to switch due to circumstances outside their control, such as mental or physical ill health and additional pressures resulting from the coronavirus pandemic.