A study carried out recently by moneysupermarket.com suggests that not switching an arrangement away from a mortgage provider’s standard variable rate is leaving millions of British consumers out of pocket.
On expiry of an introductory mortgage deal, providers commonly put their customers on a repayment rate two per cent higher than the Bank of England base rate and up to three per cent higher than the best deal available, the latest study claims.
“Many people are not making their money work hardest for them,” said Louise Cuming, head of mortgages at moneysupermarket.com.
“It’s unbelievable so many people are playing into the lenders’ hands and paying the standard variable rate,” she added.
Millions of British homeowners could find their finances stretched further and their risk of bankruptcy increased next month when the Bank of England is widely expected to increase the base rate of interest to 5.5 per cent.