Home­own­ers suf­fer­ing mort­gage ‘ap­a­thy’

33% do not know what rate they are on Bor­row­ers told to seek fi­nan­cial ad­vice

The Scotsman - - Around Scotland - By SHÂN ROSS AWARE­NESS OF MORT­GAGE RATE BE­ING PAID: Scot­land: Ex­act amount Ap­prox­i­mate

As many as one in three UK home­own­ers do not know what mort­gage rate they are on, po­ten­tially cost­ing them thou­sand­sof­pound­seachyear, ac­cord­ing to new re­search from con­sumer group Which?

Only three in ten (28 per cent) home­own­ersin­scot­land­knew their ex­act mort­gage rate, with nearly four in ten (37 per cent) know­ingth­eap­prox­i­mat­er­ate.

Which? Mort­gage Ad­vis­ers, who sur­veyed more than 3,500 home­own­ers across the coun­try, re­vealed bor­row­ers with an av­er­age-priced home could end up pay­ing as much as £347 a month – more than £4,000 a year – more on their lender’s stan­dard vari­able rate (SVR).

Re­searchers said there was a “clear level of ap­a­thy” over mort­gage deals. Four in ten (41 per cent) of those on SVR ex­plained they would be un­likely to switch if they came across a cheaper deal to­day.

Those most fi­nan­cially in­formed were Lon­don­ers and 18 to 24-year-olds when it came to know­ing their mort­gage rate.

80 per cent and 74 per cent re­spec­tively knew the ex­act or ap­prox­i­mate fig­ure re­spec­tively.

Home­own­ers in Wales were the least likely to know their mort­gage rate, with just one in five (18 per cent) know­ing the ex­act fig­ure and four in ten (40 per cent) know­ing the ap­prox­i­mate fig­ure.

Of those on SVR who had been on the same mort­gage for at least the past five years, when asked why they had not switched one in five (22 per cent) said it was not worth the ef­fort.onein­seven(15per­cent) claimed they had not thought about it.

David Blake, prin­ci­pal at Which? Mort­gage Ad­vis­ers, said cus­tomers needed to be pro-ac­tive­about­their­fi­nances.

“I would urge any­one with a mort­gage to check what in­ter­est rate you’re on and whether you’re pay­ing more than you need to,” he said. “The re­mort­gage mar­ket is highly com­pet­i­tive at the mo­ment, so there’s a good chance that re­mort­gag­ing will save you money.”

One in four (25 per cent) of those who took part in the sur­vey were on their mort­gage lender’s SVR, usu­ally cost­ing more than other prod­ucts avail­able from the same provider.

The sur­vey showed 55 per cent of home­own­ers were on fixed rates, 10 per cent on track­ers and 5 per cent on dis­count rates. Gerry Mac­don­ald, an Ed­in­burgh-based in­de­pen­dent mort­gage fi­nan­cial ad­viser, said peo­ple should get reg­u­lar “money health check-ups”.

“The ma­jor­ity of peo­ple leave it un­til they are re­ally strug­gling to stretch their pay pack­ets be­fore they think of go­ing to speak to their own mort­gage ad­viser about the prob­lem,” he said.

“How­ever, in­de­pen­dent ad­vice is the bet­ter op­tion and equips them with the fi­nan­cial lit­er­acy they need now.”

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