Experts urge borrowers to consider remortgaging this New Year

In recent years, switching energy supplier  to save money has become a no-brainer for millions of UK consumers. With most people also shopping around for car and home insurance, it's clear that switching financial services providers can result in significant savings.

With an estimated three million mortgage holders in the UK sitting on their lender's standard variable rate (SVR), there are huge opportunities for property owners to save thousands of pounds. Now, experts are calling on homeowners to make a New Year's pledge to remortgage.

Homeowners think remortgaging is 'too much hassle'

Research from a leading mortgage company has found that around three million homeowners in the UK could be saving thousands of pounds a year on their mortgage costs.

Data from Trussle has revealed that homeowners on the average SVR are paying £3,500 a year above the most favourable fixed rate on the market. If all of these borrowers switched to a better deal at the appropriate time, it would result in a staggering two million extra remortgage transactions each year, compared to the 305,000 remortgages that brokers arrange annually.

Research by Trussle and YouGov found that just a quarter of borrowers had ever switched deal in search of a better rate. One of the main reasons given for so many borrowers sitting on their SVR is simply inertia, often as a result of homeowners associating their mortgage with the stress they previously suffered obtaining it. Indeed, one in five people questioned had never attempted to switch because they think it would be too much hassle.

Ishaan Malhi, chief executive and founder of Trussle, told Mortgage Introducer: "We’ve seen major emphasis placed on switching energy supplier – growing the market to three million switches in 2016 – despite much lower potential savings for the customer (£200 per year versus £3,500 switching an SVR mortgage). If we can adopt this approach in our own sector then we’ll be able to save UK borrowers billions of pounds every year."

Remortgaging could result in savings of £2,500 a year

Figures published in the Daily Mirror state that if you are on your lender's SVR, remortgaging could save you as much as £5,000 in two years. Considering that more remortgage applications were accepted in November than in the last eight years, the chances of approval are also high.

"November’s remortgage approval levels haven't been this high for eight years and we'll no doubt see that trend continue while the base rate remains so low", added Malhi.

Mortgage expert Jonathan Harris remarks: “While confidence is a little uncertain given potential economic headwinds such as the forthcoming Brexit negotiations, cheap mortgage rates are proving attractive and those who have to get on with the job of moving are continuing to do so.”