UK households are thr-owing away £2.2bn each year on expensive mortgages, according to figures from Which?.
The Consumers' Association, publishers of Which?, believes that too many households are paying over the odds for their interest-only mortgages.
Its research shows that average monthly mortgage expenditure per household is £391. It estimates that borrowers with a standard variable rate could save as much as £475 a year on an average £58,000 mortgage by switching to a more competitive loan.
Last November, Which? looked at the top 17 lenders, which account for 90 per cent of the market, and switched half of the SVR customers to a two-year fixed-rate deal and the other half to a two-year discounted deal. The £2.2bn figure was based on average outstanding mortgage at £58,000 and average house price at £129.258.
The CA website includes a loan search for borrowers to calculate whether they could get a better deal by switching to another lender and the costs involved.
Which? principal researcher Melanie Green says: “Providers are using customer inertia to their advantage and getting away with charging longer-term customers high rates. Customers can change this by finding the best deal by approaching their lender for a better deal or taking their business elsewhere.”