Make £4,500 from your mortgage

One mortgage holder in four in the UK can save more than £4,500 on their mortgage over two years, by switching to a cheaper deal.

Over the entire population, this means mortgage apathy is costing the UK consumer £12 billion over two years, a new report from moneysupermarket finds.

This is because most mortgage lenders charge customers on their standard variable rate (SVR) between 6.5 and seven per cent interest, the price comparison website reveals.

However, people shopping around can find deals costing less than 4.5 per cent.

Louise Cuming, head of mortgages at moneysupermarket, commented: "It is incredible that over half of all mortgage lenders are charging borrowers a full two per cent more on their SVR [standard variable rate] than the current base rate.

“Lenders rely on borrower apathy, enticing them in with competitive introductory deals and relying on them to stay put once the deal is over. I urge the quarter of borrowers who are paying the SVR to consider remortgaging to one of hundreds of competitive deals on the wider market or face wasting thousands of pounds in interest over the next year alone."

Someone switching from a mortgage charging 6.5 per cent a year to a market leading two-year fixed rate deal can save more than £4,500 in mortgage payments, moneysupermarket calculates.

But she also had a warning for those shifting mortgages.

"If you are thinking of remortgaging to a better deal, make sure you are fully aware of any hidden costs, such as arrangement fees and exit fees. You may make a huge saving by remortgaging but you don’t want those effects negated with additional costs," she concluded.