Majority of homeowners did not switch mortgages during rate fall

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Research by YouGov has revealed that the majority of mortgage holders did not switch their mortgages when interest rates fell in 2016.

In Scotland, 41% of homeowners did switch their mortgages, and this is the highest percentage of mortgage switchers for any UK region, says a February 2017 FinancialReporter.co.uk article. The average across the whole of the UK is 28%.

Scotland was followed closely by East England, where 39% of mortgage holders switched. In these and other areas, the most common reason for remortgaging was to switch to a cheaper interest rate mortgage and thereby lower monthly repayments.

The lowest number of mortgage switchers is in the West Midlands, where only 19% switched mortgages. There are two reasons for this: some borrowers say that loyalty to their existing lender was the main reason for not switching, while others had not realised how much they could save through remortgaging to a low fixed-rate mortgage.

Lower mortgage interest rates followed the dropping of the Bank of England base rate to 0.25% in August 2016. In December 2016, mortgage rates were lower than anytime during the last eight years, but the majority of mortgage holders still did not switch mortgages to take advantage of this.

Anyone on a standard variable rate mortgage should consider switching to a lower rate mortgage. Many of the best mortgage deals are available through a mortgage broker, who can guide borrowers through the switching process. Brokers can also help their clients protect themselves through mortgage insurance.

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