8bn wasted on mortgages

Mortgage apathy means that UK borrowers spend more than 8 billion a year too much by not reviewing their current loan.

10:22 16 September 2004

Mortgage apathy means that UK borrowers spend more than 8 billion a year too much by not reviewing their current loan.

That means that each homeowner is wasting 800 a year by doing nothing as mortgage rates rise. This is because only one in six of the UK's 11 million homeowners have changed their mortgage in the past year, despite five interest rate rises.

Figures from advisers Clear Cut Mortgages show the UK's annual mortgage bill could be cut by a sixth, reducing monthly payments for the average person by 66.75.

Clear Cut Mortgages spokesman, Ben Thompson said: "There must be a good number of borrowers that are starting to feel the pinch of higher rates."

The company's research shows that people with standard variable rate deals from the major lenders such as Halifax and Abbey are losing out the most.

In the past twelve months the 'apathy-gap' of people who waste money by not reviewing their mortgage has grown by 600 million: from 7.5 billion last year to 8.1 billion this year.

That is partly due to rising interest rates but is also down to people taking out bigger loans on their property.

Clear Cut's research also found borrowers with loans of 150,000 a year could save 158 a month by switching, while those with mortgages of 100,000 would be 106 a month better off.