Almost a third of borrowers are paying too much for their mortgage. Are you?

Thu 31 May 2018

A new report by the Financial Conduct Authority says that around 30% of people don’t shop around for the best deal on their mortgage because there is “no easy way” to be confident that they would qualify for a mortgage.

Mark Hughes, Financial Services Director at Leaders explains: “The mortgage landscape has changed significantly over recent years since the financial crisis, and for some people these changes restrict their options currently. Although regulations have changed to ensure we do not return to poor practices of the past, there are many long standing borrowers that have paid their mortgage on time every month, but are unable to get a new mortgage deal.

“I welcome plans by the FCA to make it easier for borrowers to weigh up the strengths of the different mortgage brokers. Our expert advisers provide a professional mortgage service searching over 11,000 mortgages from over 90 lenders across the UK to find the right mortgage for each client. I am confident that this positions us well to help those who are struggling to remortgage with their current lender.”

The FCA also said that it is seeking to make it easier for borrowers to weigh up the strengths of different mortgage brokers and is planning to work with the broker sector to develop metrics to help consumers compare intermediaries.

Mark says borrowers often wrongly believe that remaining with their existing lender will give them a preferential rate and that the FCA’s Mortgage Market Study could not have come at a more crucial time, with “so many home owners finding it difficult to compare deals, unnecessarily over-paying interest, or trapped on Standard Variable Rate deals”.

He explained: “I often hear people say they are happy to just stay with the lender that they bank with, as they believe being a ‘loyal customer’ will get them preferential rates. This is mostly not the case.

“Sometimes consumers will not obtain the cheapest rate available, simply due to their criteria not fitting with that lender. Take someone who has just started out as self-employed, some lenders need an applicant to have at least three years accounts, whilst others need just a year. Having access to many lenders broadens the opportunity of gaining a mortgage for these clients.”

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Your home may be repossessed if you do not keep up repayments on your mortgage.

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For more information and advice and to find out if you are paying too much for your mortgage click here