By Maximilian Clarke
The UK is a cost-cutting nation with 92% of homeowners currently trying to reduce their monthly outgoings. Yet new research from Barclays is warning that Brits are ignoring how they could cut one of their biggest monthly outgoings - their mortgage.
Instead they are focusing on cutting back spending on takeaways, clothes and using discount vouchers at the tills missing what could be their biggest savings opportunity.
The research shows that there is a clear disconnect with people failing to realise how much they can actually save by swapping their mortgage. A staggering 58 per cent of homeowners say they have never remortgaged outside of moving home but the majority (74 per cent) said that if they could save up to £50 a month they would consider doing so. Those polled thought swapping a mortgage could save them around £10 a month, but Barclays calculations show remortgaging could save homeowners much more[ii].
With homeowners living in their homes for on average over 16 years[iii] , they are potentially missing out on years worth of decreased mortgage payments. In fact, Barclays’ data shows its range of fixed and tracker rate products could save homeowners £346m over the next two years alone.
“The fact that around six in 10 homeowners have never changed their mortgage outside of moving house, suggests that they simply don’t realise the levels of savings to be had by remortgaging. As monthly outgoings rise, and Brits fight to cut their costs, it’s important that they consider addressing their mortgage,” said Andy Gray, head of mortgages at Barclays.
Nearly half of those surveyed (44 per cent) say they spend more time on cost-cutting over the past 12 months — with three quarters of homeowners (76%) spending up to three hours a month on reducing their monthly costs which demonstrates that every £1 is important. Barclays is encouraging people to make their time, as well as their money, work hardest to ensure they prioritise which costs could achieve the greatest savings.
“Since launching Great Escape a year ago which is a cost free way to swap a mortgage, we have saved homeowners £40m but there are still millions the nation could be saving,” added Gray. “The fact that the majority of people would remortgage to save £50 a month, demonstrates that homeowners consider these potential savings to be worthwhile. There are an increasing number of good mortgage deals to be had so we are urging homeowners to act now and look at the rate they are paying, to allow them to get more out of their hard earned cash.”
Homeowners who are reviewing their mortgage arrangements can take advantage of the Barclays Woolwich ‘Great Escape’ package, which allows borrowers with a mortgage of up to 85 per cent loan-to-value to switch their mortgage to Barclays with no application fee, free legal work and valuation and £300 cashback to cover the cost of a borrower’s exit fee for leaving their present lender. Borrowers are not restricted to 'Great Escape.' We have a ‘switch and save’ package which provides free legal and valuation fees and is available on all our remortgage deals even our competitive new higher LTV (90 per cent).
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