Failure to shop around for your mortgage can cost thousands

Published by Rachel Lacey on 11 July 2018.
Last updated on 11 July 2018

‘Considerable uncertainty’ surrounds end of mortgage benefit scheme

Brits spend more time shopping around and researching new cars and holidays, than they do selecting the right mortgage deal, a new survey claims.

The research from Noddle – a credit information provider – found that the average UK consumer will spend six days researching cars and take five days to shop around for their next holiday. However, they will only spend 3.6 days investigating mortgage options.

This is despite a mortgage being the biggest financial commitment for most households. More worrying still, the research found that one in four borrowers (26%) didn’t shop around at all, with one in five (19%) accepting the first deal they were offered.

This lack of knowledge and willingness to plump for the first loan offered can often mean borrowers end up paying more every month than they need. Noddle says rates for two-year fixes can vary from 1.84% to 4.22% and adds as much as £3,000 a year to a £200,000 mortgage.

Jacqueline Dewey, managing director at Noddle, says: “The excitement of finding a house you’ve fallen in love with, combined with worries about being accepted for a mortgage, means it can be easy to rush a decision about a mortgage.

“But when we’re talking about thousands of pounds on the line, it really does pay to do your research. Rates vary across the market so don’t take the first deal available and try to speak to more than one lender. Understanding your credit score and getting it in good shape beforehand will also help you get the best rates.”

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