Homeowners with a standard variable rate (SVR) mortgage could be spending almost £3,200 a year - or £266 a month - more than necessary by failing to fix their rate, according to research by L&C Mortgages.
With more than a third - 36% - of homeowners still on a SVRs, the mortgage advisor estimates that around 1.1 million households could be collectively be paying almost £2.8bn more than they need to by sitting on the wrong mortgage deal.
L&C analysed both external research and internal data which examined the type of mortgage deals homeowners are on, their outstanding loan size and the remaining term, and found that by switching to a better deal, UK homeowners can save £216 each month or over £2,500 annually.
But somewhat shockingly, over half - 58% - have never re-mortgaged to save money.
David Hollingworth from L&C Mortgages said: “It’s worrying to see so many people still on a Standard Variable Rate mortgage as they are not the cheapest rates available. Not only is there a lack of awareness around how much could be saved but worse still a huge number of people have never even tried to remortgage to get a better deal.
“With the cost of living on the rise and day to day expenses like energy prices soaring, it is hugely concerning to see that people are paying so much more than they should be.”
“Not only have we found over a third of homeowners are on their bank or building society’s standard variable rate, but 3.4million people don’t know their mortgage rate – the chances are they could potentially save hundreds or even thousands of pounds a year by re-mortgaging to a new deal,” he added.