A recent study carried out by MoneySuperMarket estimated that 800,000 people are currently spending more on their mortgage than necessary. The regulator estimated that they could be making an average annual saving of £1,000.
WHY ARE PEOPLE OVERPAYING ON THEIR MORTGAGES?
The study also found that three in five people are not sure what remortgaging means with many feeling embarrassed to admit they had gone through the process.
This is a worrying statistic as it implies that education around remortgages is poor and that those being affected don’t have the information they need to make informed decisions.
MoneySuperMarket is concerned this uncertainty over what, exactly, remortgaging means could actually be holding people back from switching mortgages.
MISUNDERSTANDINGS
According to MoneySuperMarket’s research, nearly half of the people surveyed assigned negative connotations to remortgaging.
1 in 5 found it embarrassing and almost a quarter thought they would only remortgage to borrow extra funds, while 8% thought they would have to be in a ‘desperate’ situation to remortgage.
Embarrassment around remortgaging was more common amongst homeowners who had owned their house for between three to five years.
WHAT IS REMORTGAGING?
A remortgage is where you take out a new mortgage, often with a different lender, on a property that you already own. Remortgaging can save you a lot of money so it’s always advisable to stay on top of where you are with your current mortgage to make the most of the options available to you.
Interestingly, the survey also found that nearly a quarter of those asked thought you only remortgaged to borrow extra money. Plus, 13% thought you could only remortgage if your deal was coming to an end whilst 11% thought there was a limit to the number of times you could remortgage.
Remortgaging, like changing your energy supplier or insurance provider, should be common practice.
Remortgaging can save you a lot of money and put you in a better position financially.
We do always recommend speaking to an adviser when thinking about remortgaging so that you can make sure you’re getting the best new deal available to you.