Three quarters of homeowners were unable to define the term, “remortgaging”, according to data collected by Trussle.
Further data shows that 61 per cent of current and soon to be homeowners in the UK do not fully review their mortgage agreement before signing it, and 50 per cent only understand “some” of the language used in the paperwork.
The top term individuals did not understand was ‘remortgaging’ at 76 per cent. This was followed by ‘APRC’ at 64 per cent, ‘completion’ at 40 per cent, ‘mortgage term’ at 37 per cent, and ‘base rate’ at 27 per cent.
In contrast, the most understood mortgage term was ‘overpayments’ at 81 per cent. ‘Credit report’ followed at 80 per cent, ‘SVR’ at 76 per cent, ‘arrears’ at 75 per cent, and ‘buy-to-let’ at 74 per cent.
Furthermore, 31 per cent of individuals were unaware they had to pay a solicitor’s fee and 58 per cent did not know they would be charged for missing a payment on their mortgage.
The research is based off the results collected from 2,000 individuals.
Trussle mortgage expert Dilpreet Bhagrath says: “Buying a home is one of the biggest emotional and financial commitments someone will make in their lifetime. Yet, borrowers are being put at a huge disadvantage by not truly understanding the terminology used in their mortgage agreement.
“It is worrying that so many homeowners still do not understand remortgaging, particularly as they risk falling onto an expensive standard variable rate and could waste an average of £4,500 a year on high-interest rates.”