One in five 'pay too much on mortgage'

Almost one in five people are paying too much for their mortgage by staying with their lenders’ least competitive offering, new research has claimed.

A survey by YouGov for moneysupermarket.com concluded that 19 per cent of borrowers are staying with their lender’s Standard Variable Rate (SVR).

Louise Cuming, the websites head of mortgages, said: "It’s unbelievable so many people are playing into the lenders’ hands and paying the standard variable rate.

"As this is likely to be at least two per cent above the leading rates available, this lack of action to review their mortgage could be costing borrowers dearly – having both a negative impact on their lifestyle and their future prosperity."

The report also discovered that six per cent of borrowers are unaware of the rates they are paying, suggesting that people are not regularly reviewing their financial situation.

Most respondents to the survey said they had opted for a fixed-rate mortgage and the certainty it provides, while 11 per cent chose tracker mortgages.

According to the report, 24 per cent of people own their property outright and 42 per cent have a mortgage.

This report comes as experts predict another interest rate rise in May and various lenders withdraw their cheaper fixed-rate mortgages in anticipation.