View more on these topics

Three-quarters of borrowers have never remortgaged

A staggering three-quarters of mortgage holders have never remortgaged despite record levels of remortgaging last year. And only 4% who have remortgaged have done so more than once.

In a survey commissioned by independent mortgage advisers Charcol, 1,960 borrowers were asked about mortgage debt. The research, conducted by Market Minder in December 2002, found that as many as 8 million homeowners could miss out on potential savings of £8.4bn.

The findings come in spite of increasingly cut-throat competition in the mortgage market which has driven down the cost of monthly repayments and improved the terms on offer from many of the largest lenders. Based on the UK average home loan size, these borrowers could potentially waste £8.4 billion by never remortgaging.

Ray Boulger, senior techinical manager at Charcol, says: “Recent figures highlighted record remortgage activity but equated it with extra spending rather than saving. Our research suggests the most popular motivation to remortgage is still to save money rather than increase debt. For example, by simply remortgaging onto a current market leading two-year tracker rate a borrower with a £100,000 interest-only loan over 25 years, paying a standard variable rate of 5.75%, could potentially save up to £3,520 in the first two years – it&#39s a win-win situation.

“It&#39s surprising there are still so many borrowers who haven&#39t clocked the savings potential of remortgaging, particularly in today&#39s challenging climate with deposit savings rates and stockmarkets so subdued. Low mortgage rates is one of the good news financial stories and borrowers need to maximise the benefit where they can.”

Charcol&#39s research found that twice as many borrowers would remortgage to save rather than spend. 50% of those asked would remortgage in order to reduce their monthly payments, while only 24% would remortgage to increase their debt in order to pay for home improvements or consolidation of other debts.

Recommended

Halifax appointed to Best Advice Mortgage Network lender panel

Members of Best Advice Mortgage Network will now have access to a range of Haliax products following the lender&#39s appointment to Best Advice&#39s panel of lenders. The appointment follows last week&#39s announcement that The Woolwich has joined the Network&#39s panel. Jack Saxton, head of intermediary sales at Halifax, says: “Halifax is pleased to be joining […]

BDS launches specialist sub-prime division

BDS Mortgage Desk has launched a specialised division for sub-prime lending. The All Status Team will work closely with BDS&#39 panel of 10 sub-prime lenders and a growing number of satellite partnerships. Ann-Marie O&#39Neill, head of sales and marketing, says: “It is important to offer introducers experience and knowledge when it comes to the sub-prime […]

Cold calling and freedom

From Ken NewtonIt appears that some industry professionals can&#39t understand why many brokers are upset about the prospect of a ban on cold calling. The issue here is the industry&#39s freedom to source business directly. Anyone familiar with the DMA and TPS rules will realise that the consumer is already protected by legislation. Squealing for […]

National Mortgage Helpline launched

Independent mortgage advisers are being sought by a new consumer service launched this week – the National Mortgage Helpline. The new service provides mortgage advisers with leads from individuals in their local area who are looking for professional mortgage advice. The leads are generated through a 24-hour telephone helpline and from National Mortgage Helpline&#39s web […]

thimbnail

Almost nine in 10 employers admit failings with post-DRA compliance

The default retirement age (DRA) was abolished more than three years ago, yet new research from Jelf Employee Benefits suggests that the vast majority of employers still have some way to go to fully understand, comply and communicate the landmark legislation change that prevents older employees being forcibly retired on the grounds of age alone.

Newsletter

News and expert analysis straight to your inbox

Sign up