Failure to remortgage costs average homeowner ‘a fiver a day’

A whopping £25 million is wasted collectively every day by people who are not on the most suitable mortgage deal for them, according to research from Abbey Mortgages.

The research found that if Brits were to invest that extra £5 a day by making overpayments, they would save £38,432 off the cost of their mortgage and reduce the term by six years.

A massive 5 million Brits admitted to the UK’s third largest lender that they knew they were not on the most competitive deal – something that the bank calculates could be costing each of them in the region of £5 a day. What’s more, 47 per cent of the home-owning population (8.3 million people) admitted that they failed to review their mortgage regularly.

Nici Audhlam-Gardiner, Head of Mortgages at Abbey, comments: “£5 a day or £140 a month on average is not an insignificant amount of money and we know for a fact that 5 million people could benefit immediately by shopping around.”

Women are slightly worse than men with 49 per cent of them failing to undertake a regular review of their mortgage compared to 46 per cent of men. Women are also more likely to be on an uncompetitive rate – 31 per cent admitted they knew theirs was not the best deal they could get, compared to just over a quarter (26 per cent) of men.

The most proactive generation are the 24-35 year olds, with just 35 per cent of them burying their head in the sand when it comes to reviewing their mortgage, compared to 64 per cent of 55-64 year olds, who are also most likely to be on the most uncompetitive deal, although admittedly with a lower average loan size.

Nici Audhlam-Gardiner continued: “Abbey currently has some great rates for remortgagers, including a market leading 3 year fixed rate product at 5.69 per cent, and competitive two, five, ten and fifteen year deals. For people wanting more flexibility we also have a Flexible Plus mortgage, which is 0.49 per cent above base rate for the life of the deal and allows people the flexibility to overpay, underpay, take payment holidays and offset their savings.”