Add 10% to wages with a new mortgage

Tuesday, 9 August 2005 12:00 AM

Around 30 per cent of mortgage holders could effectively add ten per cent to their take-home pay with a new loan.

This is because millions of Britons are still paying their lender's standard variable rate rather than one of the cheaper alternatives on the market, mortgage broker Charcol has said.

Drew Wotherspoon of Charcol commented: "No matter how many times some consumers read about the savings they could make, they will still sit on their hands and do nothing. We are hoping that showing what they are wasting in pure monetary terms will finally help the message sink home. If someone told me I was turning down a per cent pay rise I would do something about it."

The firm points out that someone with a £100,000 mortgage can save £4,400 over two years - even allowing for fees.

This is equivalent to a pay rise of 9.6 per cent for someone on a wage of £25,000.

"Remortgaging has become more and more prevalent in the UK market, but there is still some way to go," Mr Wotherspoon commented.

He added: "There is also the misconception that remortgaging is a hassle and takes up too much time and effort.

"The process is relatively painless for most people and should not take more than 2 hours of a borrower's time in total. Of course, should you choose to remortgage online, this time, with some organisations, will reduce dramatically. Put another way, you are earning £2,407 an hour for some consultancy work. It really is a no-brainer."

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