Almost one third of borrowers on same mortgage deal for 10 years

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by Kay Murchie

mform.co.uk has established that 29% of borrowers have been on the same mortgage deal for at least a decade while 50% have been on the same deal for 5 years.

Remortgaging is the process of paying off one mortgage with the proceeds from a new mortgage in order to release capital, or to reduce interest payments. However, research shows that this is still unfamiliar to many homeowners. mform has said that borrowers have nothing to fear from remortgaging if they do their homework.

Francis Ghiloni of mform.co.uk said that in November 1997, the Bank of England base rate was 7.25% so mortgage customers who’ve been with the same lender for at least a decade might think they are doing comparatively well with the base rate at 5.75% currently. However, that ignores the fact that there are a wide range of deals which will reduce monthly mortgage payments significantly even on relatively modest loans.

Mr Ghiloni concluded that homeowners might be deterred by remortgaging by the potential cost. However, they can rest assured that the move will be worthwhile by thoroughly researching the market before they move.

Experts say that homeowners can expect at least 2 interest rate cuts next year.