A third of remortgagers ‘knowingly pay higher rates’

A lack of confidence and increased confusion can lead to borrowers ending up with more mortgage debt, a new survey has claimed.

Cheltenham & Gloucester has released a study that says people are paying higher rates due to worries or concerns about not being able to get a new mortgage.

Of homeowners due to remortgage in the next year, approximately one in three (37 per cent) said they will not even apply to other lenders for fear of being rejected.

In addition, 30 per cent said they would knowingly pay higher rates with their current lender rather than face the possibility of being turned down by a different firm.

Almost half (44 per cent) of the remortgagers said they believed there is a scarcity of deals. A further 15 per cent said they do not understand how companies decide on eligibility.

However, rates have recently been cut on homeowner loans by several lenders, including Abbey and Nationwide.