Failure to remortgage costs millions, says Abbey

16 September 2005
Over a quarter of a million borrowers are losing out by not switching to a better mortgage deal, a survey from the bank revealed.

A third of the 800,000 people in the UK coming to the end of their two-year fixed rate deal are not planning to remortgage and switch to a better rate, resulting in a potential loss of £20 million in monthly mortgage payments.

Abbey's director of mortgages, Gary Hockey-Morley, said: "All borrowers coming to the end of a deal should look around for their next mortgage deal as soon as they can. Shopping around is crucial because rates and fees vary greatly between lenders and can change quickly. It is really important that borrowers find a deal that suits their individual needs, remortgaging is easy to do and could result in a significant monthly saving."

The high street bank's survey also found that only one in three borrowers know what deal they are on and when it ends, while 13 per cent are unaware of what their existing rate is.

Rates have risen steeply to 5.5 per cent from 4.21 per cent in September 2003 and many customers have no idea how the rate change could affect their mortgage payments.

Borrowers who took out a two-year fixed rate deal in 2003 would have paid an average of four per cent, but when the deal runs out they will automatically revert to a higher rate of six per cent, increasing mortgage payments on a £100,000 loan by an extra £148.

The research coincides with the bank's launch of two new products designed to make remortgaging easier and cheaper.

To read more about Remortgaging, click here.

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