Even though mortgage rates are at a historic low, the vast majority of homeowners are struggling to identify the cost of deals.
New research published by Which? has found that, of 1,001 people, only five (0.5 per cent) correctly ranked a list of five products from cheapest to most expensive – with 99.5 per cent failing to do so.
This is despite around half (49 per cent) saying they felt the task was easy. Just one quarter (27 per cent) could rank the cheapest deal from the selection.
Which? says this shows that mortgage lenders need to do more in making prices easy to calculate for homeowners around the country.
Similar criticisms were recently levelled at the electricity and utilities industry, which has been accused of purposely misleading customers through hard to understand tariffs.
Which? executive director Richard Lloyd stated: “Lenders should be more transparent about the true cost of mortgages so that borrowers can more easily compare deals and find the best one for them.”
Another problem the consumer watchdog pointed out was the disparity in failed direct debit penalties. Norwich Building Society charges £5 for a missed payment, whereas Ipswich Building Society charges £35.
