Half of the UK's 11 million mortgage borrowers would prefer to shorten the term of their home loan r...
Half of the UK's 11 million mortgage borrowers would prefer to shorten the term of their home loan rather than pay smaller monthly repayments, research suggests.
Independent mortgage intermediaries Charcol commissioned a MORI survey to discover more than half of all UK borrowers use a variable rate mortgage when IFAs believe there is a wide range of deals which will pay their loan off quicker, yet seven out of ten homeowners have never remortgaged their homes.
Alison Coole, spokeswoman at Charcol says: "Over half of all homeowners are still paying their lender's standard variable rate, and 71% of homeowners have never remortgaged. We are urging these borrowers to review their options - with many mortgage rates close to a 40-year low they may be surprised how much they can save."
According to a case study presented by Charcol, a borrower on a 25 year repayment mortgage of £100,000 could save around £107 a month by remortgaging onto a Northern Rock three-year 3.99% fixed rate deal. However, it that borrower were to overpay for the rest of the term by the £107 saved every month they could lop 5.5 years off their mortgage and create a saving of around £16,000.
Charcol's thinking behind the survey was the launch of a new consumer service called Remortgage check, which gives consumers a free review of their mortgage arrangements, either to reduce monthly repayments or shorten the loan's term.
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