Bradford & Bingley has revealed that the average UK borrower would only remortgage if they could save 93 a month.
Research from the high street brokers highlights homeowners desire to save money on their monthly repayments, but only if the price is right.
With over a quarter of borrowers content to languish on their lenders standard variable rate, however, its clear that many remortgaging misconceptions persist.
The research reveals that 30% of borrowers who havent considered remortgaging havent done so because they think it lakes a lot of time and hassle, with 28% believing it is quite expensive.
Although 22% have just never thought about remortgaging, 20% wouldnt know how to go about it, and 14% dont realise they can remortgage without moving house.
But such misapprehensions could cost homeowners dear, warns Bradford & Bingley. Some 3.3 million holders could potentially save around 6bn a year in mortgage repayments if they switched from their current SVR onto a market-leading deal.
David Bitner, head of mortgages for Bradford & Bingley, says: “Homeowners are increasingly recognising the savings they can make on their monthly repayments by remortgaging onto a competitive deal, with 93 being revealed as the all important trigger point.
“Despite this growing awareness, however, there still exists some crucial misconceptions. One of the biggest factors affecting homeowners propensity to remortgage is the belief that the process is too time consuming and taxing.
“In reality though, once youve shopped around or visited a mortgage broker to find the best deal, the process is pretty simple and hassle-free, and takes typically four to six weeks.
“Another aspect affecting homeowners is the assumed cost. More than a quarter think remortgaging would be too expensive. While it is true that many lenders have increased their arrangement and exit fees over the last couple of years there are still a number of competitive deals available. There are those with free legals and free valuation fees, some with added benefits such as cashbacks, meaning, in many cases, the savings that can be achieved through remortgaging far exceed the costs.”
To spur borrowers into seeing how much they could save, Bradford & Bingley has launched a remortgage challenge with a difference. It is challenging borrowers looking to remortgage to see if it can better their existing leaders offers if not, the mortgage broker will pay them 100.
But unlike other current challenges around, Bradford & Bingleys is completely inclusive, and open to all main borrowers rather than a small number of customers from specific lenders.
The challenge aims to help borrowers get the best deal possible by saving money over the term of their deal through lower arrangements fees and competitive interest rates.
Bitner adds: “While remortgaging may not be worthwhile in every case, for instance on some lower balances, in most other cases it makes complete financial sense.”