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British homeowners could save 720 million a year by switching mortgage

14 April 2003
The Abbey National has released advice to homeowners, after the Bank of England announced that interest rates were remaining at the current low rate.

According to the building society, 57 per cent of borrowers still aren't considering switching mortgage, despite the lowest base rate since 1955.

The Abbey National's research shows that, of this 57 per cent, 72 per cent feel there are no savings to be made.

However, the report claims that 720 million could be saved every year by homeowners, just by looking into switching to a more competitive mortgage.

A fifth of borrowers said that they would not consider switching mortgage because they 'couldn't be bothered' or weren't aware of the financial benefits, 22 per cent stated that they believed it could take three months for the lender to make the switch and over a third (36 per cent) felt that it would take up too much of their time.

A whopping one in ten of the borrowers surveyed thought that it was only possible to remortgage when you move house.

The survey also showed that people are more likely to switch supermarkets to save a couple of pounds every week rather than switching their mortgage which could save more than £100 every month.

Head of mortgage marketing at Abbey National, Guy Aldwinckle commented, 'We are seeing an increasing number of homeowners remortgaging, but there is still a large group who are unaware of the savings to be made from switching their mortgage. '

People can overestimate the complexity and time-consuming nature of remortgaging and could save significant sums with relatively little effort.

If consumers are concerned their mortgage rates might be higher than necessary then it is worth shopping around and comparing prices before weighing up whether or not to consider switching.

Mr Aldwinckle added, 'The misconceptions about how easy and straightforward the remortgaging process can be are deterring people from looking for a better deal. However, it really can be a very straightforward process with very little time and effort needed by the customer to enable them to make what can potentially be significant savings.'