The FINANCIAL — Home owners around the world are switching mortgage providers in large numbers according to HSBC’s new Beyond the Bricks survey, The value of home.
The survey of more than 10,000 people in 10 countries finds that almost half (44%) of home owners with a mortgage have ever switched provider, while 61% have investigated getting a better deal by switching their mortgage.
The UK leads the way in mortgage provider switching (53%) while this is least common in Mexico (25%). Affluent home owners (55%) are particularly likely to have switched mortgage providers.
The appetite to switch provider is primarily driven by a desire to get a better deal or because of interest rate rises, with 55% of mortgage holders citing this as the reason for their switch. Twenty-four percent switched because their existing mortgage deal expired and 22% because they moved house or bought a new property.
The survey finds most home owners are well-informed about the fundamentals of their mortgage. Eighty percent know how much interest they are paying on their mortgage and 87% know how many years they have left to pay off their mortgage. Mortgage holders in Taiwan (93%) are the most knowledgeable about their mortgage interest payments, compared to 65% in France.
According to Richard Napier, HSBC’s Global Head of Mortgages: “It’s encouraging to see that most people know how much they are paying for their mortgage and many are shopping around for better deals. However, most customers still wait for a trigger such as moving home or a deal expiring before they reassess their mortgage. Given the potential savings available, people should consider a regular check on what’s available in the market that way they can ensure they are making the most of what’s available, be that a better rate or cash rebate offers.”
Three quarters (75%) of home owners with a mortgage have never experienced an interest rate rise in the lifetime of their mortgage, and 22% say that a 2 percentage point increase in their mortgage/ home loan interest rate would make it difficult or impossible to repay their mortgage.
The value of home is the second survey in the Beyond the Bricks series of global research studies into home ownership from HSBC.