Variable mortgages cost consumers billions

Each year five billion pounds is wasted by people paying a standard variable rate mortgage.

10:30 14 July 2004

Each year five billion pounds is wasted by people paying a standard variable rate mortgage.

The figures come from research carried out by the MarketPlace at Bradford & Bingley, which further found that 25 to 33 year olds who are self-employed, and live in London are the most street-wise mortgage-holders.

The UK's largest mortgage broker, found that this set of people are least likely to pay over the odds on a lender's standard variable rate (SVR).

The head of product operations at The MarketPlace, David Bitner, commented: "Congratulations to the young, self-employed Londoners for being the best remortgagers in the country, but even they have some work to do."

Mr Bitner believes: "There is no reason why anyone should be stuck on uncompetitive SVRs."

Yet, 41 per cent of borrowers are still paying a standard variable rate.

Mr Bitner concluded: "The fact that over 440 million is being wasted each month by people languishing on standard variable rates is worrying.

"Demanding value for money from the largest financial commitment that most of us will ever undertake is common sense, and the actual remortgage process is much more simple than most people assume."

Other findings include the fact that Scots are the worst offenders with 45 per cent of them paying an SVR, whereas only 34 per cent of Londoners are on this rate.