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How homeowners could save themselves £4,500 a year

·Finance and policy reporter
Homeowners could be saving more. Photo: Gareth Fuller/PA Wire/PA Images
Homeowners could be saving more. Photo: Gareth Fuller/PA Wire/PA Images

British homeowners could save an average of £4,500 a year by switching off their mortgage lender’s standard variable rate, an analysis suggests.

The online mortgage broker Trussle says many of the two million people on standard variable rate (SVR) mortgages have slid onto them by default at the end of fixed, tracker or discount deals.

But they warn that such “mortgage inertia,” moving onto SVRs without realising or considering alternatives, could be costing Brits an estimated £9bn of unnecessary costs over the length of their mortgages.

One in three homeowners surveyed by Trussle said the assumed “hassle” or complexity of switching put them off changing their current deal.

READ MORE: The surprising ‘best city’ for first-time buyers in the UK

An average £4,500-a-year saving through remortgaging could effectively give the average British worker a 15% ‘salary boost,’ according to Trussle.

The research suggests Londoners, typically with higher salaries and mortgages, could benefit from the highest windfall, saving almost £6,200 a year.

Ishaan Malhi, chief executive of Trussle, said: “Millions of homeowners are collectively missing out on billions of pounds as a result of switching inertia.”

He said it was true switching mortgage was neither clear or simple, and called for a government Mortgage Switch Guarantee to make the process easier, as in the energy market.

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