Only a quarter (28%) of British mortgage borrowers have ever switched provider in search of a better deal, despite the annual savings from doing so being far lower, according to a new study by Trussle.
In a study of over 4,000 people, carried out by YouGov, it was revealed that mortgage holders are more than twice as likely (63%) to have switched energy provider, than their current mortgage lender.
Switching energy provider can lead to savings of around £200 a year, a small sum compared to the £2,800 the average UK household pays over the odds by not shopping around for the best mortgage.
In August, the Bank of England cut the base rate for the first time in seven years, to 0.25%, prompting a wave of mortgage rate reductions from lenders. The move was designed to put more money in the pocket of consumers, but millions of borrowers are failing to reassess their mortgage, with a staggering 94% saying they haven’t considered switching to a better deal since the base rate was lowered.
Respondents were also far more likely to have switched car insurer (60%) and mobile phone provider (42%) than mortgage lender.
When asked what had stopped them switching mortgage, one in five borrowers said they feared the process would be too much hassle, while 14% claimed it was too complicated. Around one in seven (15%) claimed they haven’t switched because they thought they would be penalised for doing so, while just 7% said they stay with their current lender out of loyalty.
Ishaan Malhi, CEO and founder of Trussle, said: “It’s shocking that almost three quarters of mortgage borrowers have never switched provider in search of a better deal. Especially as households across the UK are throwing away thousands of pounds every year by failing to take advantage of the best rates on the market.
“Part of the problem is clearly a lack of awareness, but many borrowers are simply reluctant to face the ordeal of switching. However, mortgage rates have fallen to record lows, and technology is making switching mortgages easier than ever. Now’s the time for borrowers to take charge of the situation.”
According to the research, borrowers in Scotland are most proactive when it comes to switching mortgage with 41% having done so. This is considerably higher than the 29% of Londoners who have switched, and far more than the 16% of borrowers from the Midlands who have tracked down a better mortgage deal.
Borrowers who have previously switched to a better mortgage rate are far more likely to have taken the initiative when it comes to other payments. More than a third (37%) of ‘switchers’ have also changed current account, while 80% have changed energy provider. For borrowers who have not switched, these figures were far lower - 17% and 56% respectively.