Half of homeowners view remortgaging negatively
Three in five people are unsure what the term ‘remortgaging’ means, according to research from MoneySuperMarket.
The FCA’s Mortgage Market Study estimates that 800,000 consumers are currently spending more on their mortgage than necessary and that switching could result in average annual savings of £1,000.
Yet MoneySuperMarket’s research suggests that uncertainty over the meaning of remortgaging could be holding borrowers back from realising such savings.
It found that nearly half (45%) of people surveyed assigning negative connotations to the term, with one in five embarrassed to admit they’ve remortgaged.
Almost a quarter (23%) think you would only remortgage to borrow extra funds, while 8% believe you have to be in a ‘desperate’ situation to remortgage.
This is despite 57% saying they have remortgaged their property, with 9% doing so for the purpose of releasing funds and 21% to get a better rate.
Jameel Lalani, head of mortgages at MoneySuperMarket, commented: “We’re used to talking about switching our energy supplier, current account or car insurance – but when it comes to our mortgage, for many it seems like an alien concept.
“It’s true that remortgaging can mean borrowing against your property – which might be an option for people who want to pay for home improvements or other debts. More often than not, it simply means changing your deal, either via switching to a new lender, or by moving onto a new deal with your existing lender.”
Source: Financial Reporter