Two in five UK homeowners do not compare all mortgages before taking one out, despite citing interest rates as the most important factor when considering a mortgage, according to Moneysupermarket.com.
The research also revealed that only one in five people compared several options and providers themselves before making a decision, and a further 22% took the advice of a mortgage broker when changing mortgage.
Louise Cuming, head of mortgages at Moneysupermarket.com, says: “Brits should be concerned – with so many people choosing their mortgage without comparing the market it is inevitable that many will not be getting the best deals.”
The survey also found that 82% of homeowners said low interest rates were the most important factor in choosing a mortgage, while 41% of respondents said low fees were one of the top three reasons for choosing a mortgage.
Moneysupermarket.com says, by concentrating on the headline rate, many borrowers may be losing out on thousands of pounds over the full term of the deal.
The research, part of Moneysupermarket.com’s ‘Mortgage Map’ initiative, which aims to uncover trends in the British mortgage market, has also found that age can influence loyalty to a particular provider.
The survey found that 19% of 18 to 24 year olds stuck with their existing provider when choosing a mortgage, compared with 33% of those aged 45 and over. A quarter of 18 to 24 year olds compared several different options, while only 17% of those aged over 45 did so.
Commenting on these findings, Cuming says: “The figures show the older generation has far more loyalty to providers and are less likely to shop around. I would remind them that loyalty comes at a price and that regardless of age everyone should shop around.”
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