Half of all homeowners whose fixed rate deals end soon have not started looking for a new mortgage deal, according to Moneysupermarket.com.
The news comes as over £30bn of fixed rate mortgages come to an end during July, with most homeowners set to pay considerably more.
A poll of Moneysupermarket.com users found 51% of homeowners with fixed rates have not started looking at new deals, despite approaching the end of their low rate deal.
The poll found one in six have found a new mortgage deal, but fear they will face difficulties meeting their new monthly repayments, while 18% have struggled to find deals they can afford.
Louise Cuming, head of mortgages at Moneysupermarket.com, comments: “Many homeowners will be plunged into a borrowing underclass in July when their fixed rate deal comes to an end.
“Banks are cherry picking customers, leaving many people unable to find affordable deals to service mortgages taken out in better times, when they were plentiful and easy to get hold of.”
Cuming urges homeowners who are coming to the end of their fixed rates to be pro-active to ensure they get the best deal available.
She says borrowers should start by approaching their lender to find out what they will offer, and use this as a benchmark to compare rates.
They should then speak to a broker who may be able to find products to suit specific circumstances. She also advises borrowers to move quickly as many of the best deals are quickly withdrawn from the market.
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"Given the concerns by mortgagors about being able to service the loan I would challenge advisers/brokers and mortgagees to prove TCF applies to mortgagors who have insufficient protection, against loss of job or illness/accident.
Why is this NOT an integral part of the mortgage sale ..for those with insufficient savings to fall back on during a long term period without an income ?
If 'affordability' of the mortgage is the issue at point of sale, then how is it possibly TCF to lend to/broker a deal for people who would then find it difficult if not impossible to service the loan/keep a roof over their heads in the event of unforeseen loss of job or loss of income following an illness or accident ?
We have seen what NuLabour's attack on both the sellers of pensions resulting in a public review as well as increased tax greed on pensions has done..now protection, which should be the initial starting point of any financial planning discussion, not an afterthought... now the unforeseen unintended consequence of the general attack on PPI sales is the misunderstanding by advisers/brokers/Regulators and the media thus the public of the value of long term IP/Ci/MPPI & UCover, as applicable...why else do we have a growing protection gap with *11.8 Million mortgage holders where only **52% have any form of protection..why may not even be the correct sort or the best value for that mortgagor ?
An increased understanding is called for through education of adviser and consumer alike, I believe, because it is the 'Advisers' job to advise...not simply 'Broker' so the mortgagors' become broke under TCF, because of lack of suitable protection, surely ?" Brian Lentz, former IFA and mortgage broker
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